Study: More Americans opting out of banks
A new FDIC report finds since the recession, more Americans are not using banks as much as they used to.
They're turning to check cashers and payday lenders to manage their money.
The study revealed the so-called un-banked population grew to 8 percent of U.S. households last year.
That calculates to roughly 17 million people without a checking or savings account.
"The banking business is changing, and we recognize that ," said Mike Henderson of BancorpSouth Bank in Tyler.
Henderson says BanCorp South Bank in Tyler has decided to adapt and appeal to customers who are opting for non-bank institutions, like check cashers and payday lenders.
"One of the things were providing is reloadable cards," Henderson said. "Some of the other institutions of the unbanked or underbanked are offering that and we wanna be in that business too."
With so many people struggling financially these days, fees and overdraft charges are said to be likely reasons for the switch to non-bank banking. but also, Henderson says it's a better way to control your spending habits.
Without banks though, some financial advisors say it could leave people susceptible to abusive practices at nonbank institutions, because they aren't held to the same standard.
Financial Advisor Jay Oliver of Rose Point Capital in Tyler says you can't spend more than you have if you're paying cash.
There are also fees involved though in nonbanking that may even be higher than using a bank.
Oliver said to be cautious, because nonbanking institutions have different regulations than banks, and not having credit could affect you down the line.
We also spoke with a few nonbanking institutions, who declined to comment on the record, but said there is a big market for their business right now.
For the full report, click here.