The Financial Gap: 33% of Unbanked U.S. Households are Hispanic

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Caitlin Mullen.- While the U.S. economy shows that more people have access to traditional banking services than ever before, a deeper look at the data reveals that financial access remains heavily divided along racial lines.

According to the Federal Deposit Insurance Corp.’s (FDIC) 2023 National Survey of Unbanked and Underbanked Households, the overall proportion of U.S. households without a bank account dropped to a historic low of 4.2% (5.6 million). However, this milestone does not reflect the reality for all communities.

The Numbers Behind the Racial Divide

The report details that Hispanic and Black households are more than five times as likely to be «unbanked» (meaning no one in the household has a checking or savings account) compared to white households.

The FDIC statistics highlight a stark disproportion:

• Hispanic households: Represent 14.8% of all U.S. households, yet they make up a staggering 33.4% of all unbanked households.
• Black households: Account for 12.9% of the U.S. population but comprise 32.3% of unbanked households.
• Underbanked status: About 1 in 5 Hispanic, Black, Native American, or Pacific Islander households are considered «underbanked.» This means they have a bank account but still rely on nonbank services like check cashing or international remittances. In contrast, this figure is only 1 in 10 for white households.

Why Are Families Avoiding Traditional Banks?

According to the FDIC, the primary barriers are economic constraints and a lack of trust. The most cited reason for not having an account was «not having enough money to meet minimum balance requirements,» followed closely by «don’t trust banks.» Consequently, two-thirds of unbanked households rely entirely on cash.

Furthermore, Hispanic and Black households are far more likely to lack «mainstream credit,» such as credit cards, auto loans, or other financial products that build a formal credit history.

The Rise of Apps and Financial Alternatives

While the number of completely unbanked people declined, the share of «underbanked» households grew from 14% in 2021 to 14.2% (19 million) in 2023.

In response to these gaps, consumers are turning to technology. Last year, about 50% of all U.S. households used nonbank online payment services like PayPal, Venmo, and Cash App—up from 46.4% in 2021. For unbanked families, these digital apps and prepaid cards are increasingly serving as substitutes for basic banking transactions.

The survey also explored newer consumer financial tools:

• 4% of all households used «Buy Now, Pay Later» (BNPL) services in 2023, though 1 in 8 users missed a payment or paid late.
• 4.8% of households owned or used cryptocurrency.

«Significant disparities in access to the banking system for minority, lower income, disabled, and single-parent households still exist and need to be addressed,» FDIC Chairman Martin Gruenberg said in a press release.

As the demographics of the unbanked evolve—becoming less disproportionately young and, in some cases, more tech-savvy—the FDIC warns that the economic inclusion strategies of the past urgently need an update to truly connect with the nation’s Hispanic and minority communities.