Low-income families still leery of bank accounts

Reasons come down to minimum balance requirements and/or bank fees, according to a Pew Health Group survey of 2,000 households in Los Angeles. Report found that more families were closing accounts between 2009 and 2010 than opening them. A local campaign called Bank on LA has slowed the rate of departures, "but it could not overcome persistent concerns by the financially-stretched participants." And alternative financial services, such as check-cashing operations, continue to be used heavily, even among folks who have bank accounts. From the report:

Our survey finds that working poor households in Los Angeles face barriers to banking at each step of the way. These families struggle to open bank accounts, keep those accounts open in times of economic distress, and fully and effectively utilize banking services. Costly overdraft and ATM fees, regular use of alternative financial services and the growth in the number of the Newly Unbanked indicate that the Banked in these low-income communities face persistent barriers to effectively and beneficially using their bank accounts. Thus, strategies that address only barriers to entry are unlikely to yield long-term results.