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Report from AARP Public Policy Institute and AARP Foundation


Sept. 24, 2010


Media Relations 


Report from AARP Public Policy Institute and AARP Foundation Offers Key Insights on Unbanked and Underbanked Older Americans

Analysis indicates disproportionate impact on minorities, identifies key barriers to being banked and calls for more public and private sector focus on unbanked and underbanked 45+

WASHINGTON, DC—A report released today from the AARP Public Policy Institute for the first time looks at key characteristics of the unbanked and underbanked 45+ population and calls on government, nonprofit and industry leaders to focus on improving banking services to help ensure long-term financial security for this vulnerable population.

“A Portrait of Older Underbanked and Unbanked Consumers,” funded by the AARP Foundation, finds that 16.5 million people aged 45 and over live in unbanked households— with African-Americans and Hispanics overrepresented among this population. Financial concerns topped the list of barriers that prevented survey participants from having a checking account, particularly not having enough money to make an account useful and hidden account fees and charges.

“Lack of access to banking services makes it incredibly difficult for many older Americans to manage their money and save for retirement,” said Susan Reinhard, AARP senior vice president for public policy. “The banking industry, government and the nonprofit sector need to work together to offer services, and minimize risky practices like using auto title loans or credit card cash advances.”

Key report findings include:

* Almost 17 million people aged 45 and older live in unbanked or underbanked households in the United States.

* African-Americans and Hispanics are disproportionately represented among the older unbanked populations – while African-Americans comprise about 11 percent of the U.S. age 45-64 population, they comprise nearly a third of those who are unbanked. While Hispanics comprise about 10 percent of the age 45-64 population, they comprise nearly 13 percent of those who are unbanked.

* More than half of the older unbanked population reported household income under $25,000.

* More than half (52%) of underbanked and unbanked consumers aged 45 and over prefer to use banks or credit unions for financial transactions. 

* Four of the six reasons most frequently selected by age 45+ respondents for not having a checking account were financial concerns; for example, “I don’t have enough money to make an account useful”, and “A checking account is too expensive.”

* Nearly a quarter (24%) of underbanked and unbanked persons over age 45 have used an auto title loan, and almost one in five have used a cash advance on a credit card (18%). 


The report calls on policymakers to help unbanked persons become banked, and for banks, credit unions and other institutions to create products and services that better fit the needs of lower-income, minority populations. Key to the recommendations is the finding that unbanked and underbanked people 45+ show a strong preference for using banks and credit unions. The report calls on banks and credit unions to offer more options for this audience, such as introductory accounts to build credit, and accounts and loan products for people with poor credit.  The report also identifies key areas of focus for nonprofits and philanthropies, including:

* Convening public and private sector stakeholders to identify new ways to reach this population

* Investing in  funds that  encourage innovation in this arena

* Funding technological investment, research and evaluation 

* Advocating for consumer protection and safety

“Lower-income older Americans are concerned about being able to meet their basic housing and financial needs in retirement,” said Jo Ann Jenkins, AARP Foundation president. “Getting them banked gives them greater ability to access financial services that can help keep them economically secure in retirement. We look forward to working with our colleagues in the nonprofit and philanthropic communities to meet the needs of this vulnerable population.”

The report also encourages government leaders to make funding available for Community Development Financial Institutions (CDFIs) to provide products and services that will help unbanked consumers more fully access mainstream financial services. 

For the full report, recommendations and resources for underbanked and unbanked consumers, visit 


To study the older unbanked and underbanked population in the United States, the AARP Foundation and AARP's Public Policy Institute collaborated with the Center for Financial Services Innovation (CFSI) to analyze survey responses of age 45+ persons included in CFSI’s  2008 national survey based on Experian data.  Estimates of the total number of underbanked and unbanked persons in the U.S. are based on the 2009 FDIC National Survey of Unbanked and Unbanked Households. 

AARP Foundation is AARP’s affiliated charity. Foundation programs provide security, protection and empowerment for older persons in need. Low-income older workers receive the job training and placement they need to re-join the workforce. Free tax preparation is provided for low- and moderate-income individuals, with special attention to those 60 and older. The Foundation’s litigation staff protects the legal rights of older Americans in critical health, long-term care, consumer and employment situations. Additional programs provide information, education and services to ensure that people over 50 lead lives of independence, dignity and purpose. Foundation programs are funded by grants, tax-deductible contributions and AARP. For more information about AARP Foundation, please log on to

AARP’s Public Policy Institute (PPI) informs and stimulates public debate on the issues we face as we age. Through research, analysis, and dialogue with the nation’s leading experts, PPI promotes development of sound, creative policies to address our common need for economic security, health care, and quality of life

 AARP is a nonprofit, nonpartisan social welfare organization with a membership that helps people 50+ have independence, choice and control in ways that are beneficial and affordable to them and society as a whole. AARP does not endorse candidates for public office or make contributions to either political campaigns or candidates. We produce AARP The Magazine, the definitive voice for 50+ Americans and the world's largest-circulation magazine with over 35.1 million readers; AARP Bulletin, the go-to news source for AARP's millions of members and Americans 50+; AARP VIVA, the only bilingual U.S. publication dedicated exclusively to the 50+ Hispanic community; and our website, AARP Foundation is an affiliated charity that provides security, protection, and empowerment to older persons in need with support from thousands of volunteers, donors, and sponsors. We have staffed offices in all 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands.


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