Search This Blog

Friday, October 21, 2016

FDIC: Share of ‘Unbanked’ Continues Downward Trend 

The share of the population that is unbanked continued falling in 2015, reaching 7 percent -- the lowest share yet recorded in the FDIC’s biennial survey of unbanked and underbanked households released yesterday. The reduction in the unbanked was also seen across many population segments and demographics that have historically been less likely to use mainstream financial services, including blacks, Hispanics, the disabled and low-income households.

Half of the ongoing decline in unbanked status can be attributed to economic improvements, the FDIC said. As people become employed or grow their assets, they often enter or return to the banking system. Major contributing factors to unbanked status include not having enough money to justify opening an account -- more than one-third of the unbanked said this was the main reason -- as well as income volatility.

Meanwhile, the share of households that were “underbanked” -- those that have a bank account but have also used nonbank, alternative financial services such as check cashers -- remained steady at 19.9 percent. Continuing a growing trend from previous surveys, more than a quarter of unbanked and 15 percent of underbanked households relied on prepaid cards in 2015, versus about 7 percent of fully banked households.

The survey indicated that prepaid card users often use the cards as a substitute for a bank account; unbanked households that had previously had a bank account were 22 percentage points more likely to use them than those who had never had a bank account. Indeed, 12.6 percent of unbanked households used a prepaid card as an emergency savings vehicle.

The survey, conducted every two years since 2009 by the FDIC and U.S. Census Bureau, found that 46.5 percent of unbanked households were previously served by a bank, consistent with previous survey results. About a quarter of these said they were likely to re-open a bank account in the next year, down 10 points from 2013.

Read the survey here.

--ABA Daily Newsbytes

Thursday, October 20, 2016

Housing Starts Plunge 

Housing starts fell 9.9 percent to a seasonally adjusted annual rate of 1.05 million units, the Commerce Department said yesterday. The September figure was 11.9 percent below the September 2015 rate. Permits for new construction, which are considered a gauge of future demand, were 6.3 percent above August’s rate, landing at an annual rate of 1.15 million--   ABA Daily Newsbytes

Tuesday, October 18, 2016

Millennials Limit Their Spending

65% of Americans Are Concerned With Spending

 In this climate, who knows what lies ahead, so many Americans are choosing to play it safe.
To that end, nearly 2 in 3 Americans are limiting their monthly spending, according to a new report by

The majority of those polled cited the need to save more money as the reason behind a more cautious approach to spending, while one-quarter blamed stagnant income, followed by worries about the economy and having too much debt.

Read more here.

Friday, October 14, 2016

Friday Rate Update

Mortgage Rates Edge Up 

The rate for a 30-year fixed-rate mortgage averaged 3.47 percent this week, up from last week’s 3.42 rate, Freddie Mac said yesterday. At this time last year, the 30-year FRM rate averaged 3.82 percent.

This week's 15-year FRM averaged 2.76 percent, up from 2.72 a week prior. A year ago, the 15-year FRM averaged 3.03 percent

---ABA Daily Newsbytes

Friday, September 30, 2016

Friday Rate Update

Fixed Mortgage Rates Tumble to Near Yearly Lows

Freddie Mac reported on Sept. 29 that the average 30-year fixed-rate mortgage fell to 3.42 percent this week from 3.48 percent a week ago and 3.85 percent a year ago. This marks the lowest point for the 30-year fixed rate since it hit a yearly low of 3.41 percent in early July. Meanwhile, the average 15-year fixed-rate mortgage dropped to 2.72 percent from 2.76 percent a week ago and 3.07 percent a year ago, and the five-year adjustable-rate mortgage edged up to 2.81 percent from 2.8 percent a week ago but was down from 2.91 percent a year ago. "Investors flocked to the safety of government bonds causing the 10-year Treasury yield to continue its descent following the [Federal Open Market Committee's] decision to leave rates unchanged," said Freddie Mac chief economist Sean Becketti. "The course of the economy is uncertain, yet consumers continue to be a bright spot. The September consumer confidence index is up 3 percent to 104.1, exceeding forecasts and reaching a new cycle high."

From "Fixed Mortgage Rates Tumble to Near Yearly Lows"
Washington Post (09/29/16) Orton, Kathy

Thursday, September 29, 2016

Survey: Bank Customers Seek Mortgage, Auto Loan, College Savings Advice    

Two in five Americans say they plan to consult their bank for advice in the next year, with the most common topics for advice being auto purchases, mortgages and saving for college, according to a recent ABA/Ipsos survey.

Fifteen percent said they would seek advice on a car loan, while 14 percent said the same about a home mortgage. Eleven percent said they would look for guidance on financing their own education, while one in 10 said they would look for information about their children’s education. Finally, 10 percent said they would seek advice on retirement planning and 9 percent on financing a home remodeling project.

“Banks can be effective partners in helping customers improve their financial well-being and achieve some of life’s biggest milestones,” said ABA SVP Nessa Feddis. “Bank employees pride themselves on listening to their customers, helping them to identify goals and connecting them with the financial solutions they need."