Unbanked and Underbanked CommunitiesThis paper will focus on unbanked and underbanked individuals and communities, the challenges they face, and potential solutions that can be provided to unbanked and underbanked communities. alleviate the trials and tribulations of these communities. Before we dive into the world of the unbanked and underbanked, I think it's necessary to define what we mean when we refer to someone as unbanked or underbanked. Additionally, I will explain the importance of the Community Reinvestment ACT and its central role in efforts to improve relationships between banks and the unbanked and underbanked. One or more groups of individuals may be considered unbanked when they do not use banks or credit. syndicates to conduct their financial transactions. These people do not have a checking or savings account. According to an FDIC survey of unbanked and underbanked households, 8.2% of U.S. households are unbanked — in other words, 1 in 12 households, or 17 million adults, live in unbanked households. unbanked. checking or savings account, but in addition to traditional banking services, they also use alternative financial services, such as non-bank money orders, payday loans, rent-to-own agreements, and pawnshops. According to the FDIC survey mentioned above, 20.1% of U.S. households are underbanked, which represents 24 million households or 51 million adults. Unbanked and underbanked individuals generally share some common characteristics such as: individuals and families with low income, no formal education (or less education than other groups), young adults, and headed households by women. The unbanked are a middle of paper... just like the unbanked. The unbanked and underbanked are those who cannot afford alternative financial services, and yet they are virtually forced to use them due to their inability or unwillingness to deal with banks. As mentioned above, a lack of understanding of the American banking system often leads individuals to distrust banks, and therefore have to resort to alternative financial services. A good example would be Sarah Yeats (real name withheld), a fully employed professional bartender since high school. Sarah opened a bank account while in college and inexperienced in handling check registers, she quickly bounced a few checks. (Rotter, Kimberly). John Griego of Albuquerque, New Mexico, shares a similar story. John states that he has difficulty balancing his checking accounts, so he tends to bounce bad checks. (Rotter, Kimberly).