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The Unbanking of America - Are Check Cashing Centers and Pay Day Lenders really bad?

Recently, I listened to NPR's Podcast Fresh Air as they inteviewed Lisa Servon about her book The Unbanking of America: How the New Middle Class Survives. I found the interview increadibly interesting. Considering the number of individuals with checking and savings accounts has dropped, more and more individuals are using alternate finanical services such as pre-paid cards, check cashing centers, and payday lenders. Addording to Servon, 'Some people have been pushed out of the banking system entirely and a lot of the people that I worked with told me they simply can't afford it." Some facts shared during the podcast include:
  • increasing numbers of working Americans are using alternative financial services and turning their backs on traditional banking because banks don't meet their needs and whack them with fees and charges they aren't expecting.
  • In 2011, she notes, Americans paid $38 billion just in overdraft fees. 
  • About 8 percent of Americans don't have a bank account and another 20 percent have a bank account but they rely on alternative financial services.
  • The reasons people use alternate financial services include cost savings and transparency. 

I invite you to check out the full transcript of the discussion. I'd also like to know what these perspectives mean for us in adult education: 

  • What does this mean for us as educators as we teach finanical literacy? 
  • Did this podcast change your mind about check cashing centers? 

I'd love to hear your thoughts. 

Sincerely, 
Kathy Tracey

Comments

Andy Nash's picture
Fifty

Yes, I heard this interesting interview, too. What a great civics project it would be to have students build language/literacy skills by surveying their peers about banking, build their math skills by analyzing the data, and build their civic skills by presenting their findings and recommendations to their community and (directly or through the media) to those banks that could better serve their needs. That would be an integrated-skill, contextualized, project-based learning experience that would address many of the drivers of persistence!

Andy

Kathy_Tracey's picture
One hundred

I love this idea! There are so many rich extensions that can be built on this topic. Think about the math skills in evaluating the use of a check cashing center versus a traditional bank. But, I have to admit the idea that check cashing centers were actually 'better' for middle to low income individuals really stood out to me as it is in direct conflict with what I have been teaching for years! My assumptions have always been that traditional banking equaled legitimacy and movement toward stability when, in reality, many individuals find the alternative financial industry is stable and reliable for them. Think of the lively and meaningful classroom discussion that could occur based on this topic. 

I'd love to hear what others think about the alternative financial industry and it's impact on our adult learners.

Kathy 

BrookeIstas's picture
One hundred

Wow! This reminds me of another great book - "Gotcha Capitalism" by Bob Sullivan that was published in 2007.  I remember reading it and trying to understand how credit cards figure their interest and being confused (And I have a math degree)!