No Bank Account? That’s Exactly What Predators Are Banking On

What Does It Mean to Be Unbanked?

Millions of women in this country don’t have access to a bank checking account, so they may need to rely on alternative, potentially predatory services like check cashers, payday lenders, pawnbrokers, or prepaid credit cards to function. The term for this is unbanked; it affects single American women and single moms (especially minorities) the most.¹ It’s probably not because they don’t want a bank account. Overdraft fees, minimum balance requirements, bad credit from unpaid bills, financial abuse from a partner, geographic distance from a branch, or simply not earning enough can make having a bank account seem almost impossible. Those who don’t have access to traditional financial institutions like a bank or credit union are vulnerable to services that offer help in the short run but tack on fees + interest rates that pile up more debt in the long run. These services are famous for gouging. Yet, underbanked people (those with a bank account, but who still choose to use alternative services) make up one in six Americans (33% of Millennials).²

How Many Americans Are Unbanked?

You might be shocked. According to the FDIC (Federal Deposit Insurance Corporation):

In 2025, a stunning 17 million people were unbanked, up from 10 million in 2022; 43 million are underbanked. “In very low-income areas like the South Bronx, more than half of the residents have no bank.”³
More than half of these people were women, and more than half of those women were single moms. In a 2021 survey (still cited as current), 15.9% of single-mom households were unbanked – the highest unbanked rate in the country + way more than unbanked households with two income earners or single fathers (1.9%).⁴
Demographics and race are big factors too. “In the Deep South,” according to the Hope Policy Institute, “households are more likely to be unbanked and underbanked: over one quarter (28%) are led by a single female head of household.”⁵
The survey also showed that unbanked women are probably already living below the poverty line and, again, single mothers were significantly worse off than single fathers.
In some rural areas and big cities too, banks simply don’t exist. These are banking deserts, same as food deserts, driven by demographics where money both is, and is not.

What Are Banking Deserts?

These are geographic locations where a local brick and mortar bank branch doesn’t exist + the nearest branch is farther than a certain radius. Digital technology has tried resolving this problem with online + mobile banking, which is the main method used now by both banked and underbanked people to carry out transactions. Women living in bank deserts, though, tend to also live in areas with unreliable WIFI/ broadband service, so they can’t necessarily depend on the internet to use these methods. Banking deserts skew across socioeconomic and racial lines too + have the greatest impact on poverty-line brackets, including single mothers + racially mixed + the disabled.⁶

How Are Bank Deserts Even Possible in Today’s World?

Disproportionate Wealth: Banks are generally located where there is more wealth.

“While bank closures are not a new phenomenon, their pace has accelerated in recent years. The Federal Reserve Bank of Philadelphia’s U.S. Bank Branch Closures and Banking Deserts report notes that the trend began during the Great Recession [2007-2009] but was significantly exacerbated by the COVID-19 pandemic.”⁷

Mistrust: Even if there is a bank account option, a significant percentage of unbanked and underbanked people don’t trust banks. How come? For three main reasons, says the AFCPE (Association for Financial Counseling and Planning Education):⁸

Cost: It’s true that payday lenders and the sort are criticized for highway robbery, but commercial banks can be expensive too if you are living paycheck to paycheck. The overdraft fee from one bounced check can start an avalanche of successive bounced checks with accumulating fees resulting in hundreds of dollars debited before the customer may even be aware the account was overdrawn in the first place.⁹
Depersonalization: A study showed that many lower income people prefer doing business with pawnshops or check-cashing outlets, aka, RiteCheck, rather than a bank, because they have a long-standing, face-to-face relationship with the tellers. Those relationships provide a sense of trust and community.¹⁰
Lack of transparency (perhaps the biggest reason): Those who prefer RiteCheck, etc., say they can never predict when and what hidden fees banks will charge them: “At most check cashers, by contrast, the fees for each transaction are typically displayed on large neon signs that span the row of teller windows, like the menu sign at a fast-food restaurant.”¹¹

“People just don’t understand the value that financial institutions bring.” Banks are fully insured, so customers’ money is protected. A traditional bank relationship also gives financial credibility to account holders. But there is little understanding of these benefits. What difference do they make if your credit is lousy + you don’t have more than a few dollars to your name.

What Is Predatory Lending and Why Is It Bad?

Small-dollar loans to tide you over until your next paycheck can charge outlandish fees, like, triple the annual percentage rate (APR) on a credit card. Each US state determines how much you can borrow – usually up to $500 – but some states ban the practice outright. Payments are typically due within two weeks, close to your next payday, but if you can’t afford to repay a payday loan on time, you can renew it or roll it over into a new payday loan, which compounds finance charges and can start digging a debt hole that is difficult to climb out of. You’ve heard of robbing Peter to pay Paul… Specifically, the fees on payday loans range from $10 to $30 per $100. But because the repayment terms are so short, APRs are usually 400% or higher, compared with a 30% interest limit on credit cards/ 36% max on personal loans.¹² Predatory lenders rake in billions per year from individuals whose money essentially evaporates, according to a 2025 study: Down the Drain: Payday Lenders Take $2.4 Billion in Fees from Borrowers in One Year.¹³

Have You Been Fleeced by a Payday Lender?

Pew research found that more than one in four payday loan customers experienced an overdraft fee as a result of a lender’s attempt to collect a payment from their bank account. The CFPB identified one lender that debited a borrower’s account 11 times in a single day.¹⁴ The “Preserve the Payday Lending Rule” went into effect on March 30, 2025, to protect people from such unfair debt collection tactics.¹⁵ If you have been taken advantage of by a predatory payday lender, please contact us. While rules about these services vary from one state to another, we want to hear from you and hope that together we can keep women from being victimized by financial scams.

Sources ¹ Courtney Thomas, “FDIC Data Reveals Inequities in Financial Inclusion for Women,” Hope Policy Institute, February 27, 2023. ² Unnamed, “What does it mean to be Unbanked vs. Underbanked, MicroBilt News, September 23, 2023. ³Lisa Servon, “The Real Reason the Poor Go Without Bank Accounts,” Bloomberg, September 11, 2025. ⁴ Unnamed, “Report on the Economic Well-Being of U.S. Households in 2024,” Federal Reserve System, May 2025. ⁵ Unnamed, “What Banking Deserts Mean for More Than 12 Million Americans,” Block, October 11, 2024. ⁶ Alaina Barca and Harry Hou, “U.S. Bank Branch Closures and Banking Deserts,” Federal Reserve Bank Philadelphia, February 2024. ⁷ Paige Cerulli, “Is Your Local Bank Closing? Why Branches Are Disappearing Nationwide,” Kiplinger, July 9, 2025. ⁸ Lisa Servon, “Three Reasons Why People Don’t Trust Banks,” Association for Financial Counseling & Planning Education (AFCPE), 2015. ⁹ Alaina Barca, Crystal Flynn, “The last bank branch standing,” FedCommunities, January 15, 2025. ¹⁰Unnamed,^“Payday, High-Cost Loans,” Consumer Federation of America (CFS) February 6, 2025. ¹¹ Ibid. ¹² Winnie Hu, “Criticism Grows as Check-Cashing Stores Expand in Poorer Areas,” New York Times, August 5, 2012. ¹³Unnamed, “Down the Drain: Payday Lenders Take $2.4 Billion in Fees from Borrowers in One Year,” Center for Responsible Lending (CRL), February 6, 2025. ¹⁴Ibid, “Payday, High-Cost Loans, CFA. ¹⁵Adam Rust, “Preserve the Payday Lending Rule,” Consumer Federation of America (CFA), March 25, 2025.