KANSAS CITY, Mo. — Going to the bank, checking one's account on a phone, cashing a check, transferring money to a different account — these all sound like everyday errands. But for 15% of households in Kansas City, this isn't the norm.
KSHB 41 News looked at what it's like to be unbanked and the disadvantages that come with it.
Tamika Davis prides herself on two things:
"A mother. Hard worker," Davis said. "That's pretty much it. I work and I be a mother."
There were times Davis held three or four jobs at once to provide for her daughters, but she still had a hard time saving money.
"They'd be part-time; some would be full. It was like all I did, yeah, for a while was work work work, and everything I was making was going toward bills," Davis said.
Because of this, she's had a back-and-forth relationship with banks. For a while, she didn't have a bank account at all.
"It'd get to a point where I can't keep enough money in, so I close accounts or whatever," Davis said. "And then I'd be able to afford one — well, I think I'd be able to afford one — then open another one."
Davis was just like 7 million other households in the U.S. who do not have a bank account.
The Federal Deposit Insurance Corp.'s 2019 survey shows that the top two reasons people don't have a bank account are that they don't trust the bank and they don't have enough money to maintain the account.
Communities of color, low-income families and people with less education are more likely to be unbanked. Without a bank account, it can be harder to establish and build credit, reach financial goals, get access to loans and do everyday errands.
"Check cashing places, I would use that," Davis said. "Or either my prepaid cards would be direct deposit."
The FDIC says unbanked people are more likely to use prepaid cards than those who have bank accounts. These cards are easy to get but they come with more fees and don't build credit.
Many times, someone can't pay certain bills or shop online with a prepaid debit card, meaning folks have to take time out to pay bills in person.
CHES Inc., financial empowerment nonprofit, is one of the institutions taking part in the solution — a new initiative called Bank On Kansas City that helps low-income individuals open a bank account.
"They are really low opening minimum balance required accounts, as well as zero or really small maintenance fees, so regardless of what you're bringing to the bank, you can get a bank account and have access to different benefits that it affords you," said Justin Walker, director of business development for CHES Inc.
Bank On partners with more than a dozen banks and organizations in the metro that will help people open an account.
"That builds that trusted financial relationship so when the time comes to buy a house or buy a car, save for retirement, or look at your child's education, you have that trusted financial partnership already in place," Walker said.
Walker said they want to make this option more attractive than resorting to a predatory payday loan service that charges outrageous interest fees and often traps people into a cycle they can't get out of.
The Unified Government of Wyandotte County and Kansas City, Kansas, is working alongside CHES Inc. in the Bank On initiative.
"A lot of times individuals may not have grown up in an environment in which that was part of their day-to-day life, so this is just an opportunity to try to incorporate that into giving a legacy for their family," said Bridget Cobbins, the UG's assistant county administrator.
Trust is a big obstacle. Communities of color have historically faced discrimination at banking institutions, and the feeling of uncertainty is passed down.
"I have a few friends," Davis said. "They don't deal with banks."
Black and Latino households are more likely to get denied or not given as much credit as they requested. However, the outlook is improving.
The number of unbanked Black households dropped from 18.5% in 2015 to 13.8% in 2019, and the number of unbanked Latino households dropped from 16% in 2015 to 12% in 2019.
Davis has been working with Women's Employment Network on her finance goals. She now has a bank account that helps her save for retirement and an emergency fund, plus build generational wealth for her girls.
"Means a better future, and I've struggled and struggled to get to this point," Davis said. "I'm happy I'm at this point, and I try to teach them about money now."
Although the number of unbanked households has gone down in the Midwest since 2009, the numbers have gone up here in the Kansas City metro, from 5% in 2015 to 6.2% in 2019.
Initiatives like Bank On still have work to do.
The FDIC's 2019 survey showed that 64% of people who have never had a bank account are not interested at all in opening one.
Two Americas is part of a KSHB and Scripps signature issue to help introduce our community to the America you know and the America you might not know. Our role as the media is to share the news of the day, but we also seek to give a voice to people we don't hear from often.
Of course, there are many parts that make up our community, so we’re not just showing you two and we’re not pitting two sides against each other. Instead, we’re hoping to highlight solutions and showcase different perspectives to help us all better understand our area's culture, our area's past, and why our community feels the way it does today.