Nearly one out of six people in Hawaii don't have access to a bank or rely on check cashing services, pay day loans for most of their banking needs, according the Federal Deposit Insurance Corp.

Some 2.9  percent of Hawaii residents who took part in a recent FDIC survey said they don't have a basic bank account. (See:)

Another 13.8 percent said they were underbanked, meaning that they have to rely on nontraditional financial services, the FDIC said.

The problems are obvious.

Without a traditional account, it's difficult to save money or obtain low-cost loans.

Pay day loans and check cashing services are much more costly than traditional bank accounts and credit histories are difficult to compile.

To be sure, Hawaii did much better than most of the rest of the country where as many as one in four have limited or no banking services.

But the local figures are still troubling because the problem isn't limited just to the very poor.

According to the FDIC study, people making $30,000 a year to $50,000 a year about 21.5 percent have no banking services or rely on alternative banking services.

For those making $50,000 to $75,000, about 16.5 percent have limited or no access the the banking system.

FDIC report sheds no light on why the problem also plagues the middle class in Hawaii but I suspect the problem stems from the state's traditional high cost of living.

Tags: banking, check cashing services, Federal Deposit Insurance Corp., pay day loan, underbanked

This entry was posted on Thursday, December 3rd, 2009 at 7:06 pm and is filed under Biz Bites. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.