The unbanked women of New York

Written by Edil Cuepo

“Do you have a bank account?”

It’s a question that most college students and young and middle-aged professionals in New York would roll their eyes at. Who doesn’t have a bank account, right?

I thought the same thing — but I was stunned when I saw the numbers. A significant number of adults in New York City go “unbanked” (or without a bank account) every year. According to a survey by the New York City Department of Consumer Affairs Office of Financial Empowerment, over 825,000 of adults in the city didn’t have bank accounts in 2009 — the Bronx was in the lead with 28.7 percent of its households unbanked, and Brooklyn ranked next at 16 percent. NYC as a whole had 12.7 percent unbanked adults — 5 percent above the national average.

There are more than 30 percent more women than men, ages 18 to 34, below poverty line in New York City, as estimated by the United States Census Bureau in 2013. This gap is an indicator that low-income women in New York are not receiving the support, education, and attention they need to improve their economic status. Many low-income women across the globe are missing out on financial tools like banking and its economic benefits — which is where Women’s World Banking comes in.

Women’s World Banking is a global nonprofit focused on educating low-income women in developing countries and giving them access to financial tools and resources. The organization has invested itself in enabling women for 35 years, and an afternoon spent browsing through its research and studies inspired me to make people aware of the global dilemma that is women’s lack of access to financial services.

“Women around the world face similar challenges — discrimination, social and cultural biases — but for low-income women, this is more acute,” says Gayle Gatchalian, Senior Associate of Knowledge and Communications at Women’s World Banking. “There are many powerful, pervasive cultural stereotypes about women’s role in society that keep them from so many things … not just financial services.”

Women’s World Banking by The Bush Center is licensed under a Creative Commons Attribution 4.0 International License.

Despite New York being the banking capital of the world, young women in poor communities often face the same disadvantages as women in developing countries when it comes to banking. A young woman immigrant in an underserved community faces a number of obstacles in opening up and keeping a bank account, including “irregular income, inconvenient location and hours, and [the impression that] banks are irrelevant,” Gatchalian wrote in a blog post.

I encountered some of these same challenges firsthand when I worked off-the-books as a bartender while awaiting work authorization. I lived in Bushwick then (before it was “hip”) and would walk in my neighborhood and find more check cashing places than banks. The banks were closed when I finished my shift between 2 and 4am. I got paid in cash every night and I would hide it in my shoes on my way home, and later in random places in my apartment.

Working odd jobs and not knowing how much money you are taking home every week makes it tough to regulate deposits and withdrawals. A minimum balance is often required for checking and savings accounts, which can lead to fees for both overdraft and monthly services. These things add up.

The New York City’s Office of Financial Empowerment’s Immigrant Financial Services 2011 study reported that out of a sample of 1,324 immigrants, 32 percent did not have a bank account. An important finding is that the barriers are based on the immigrants’ perception of bank requirements. Some stated that they were still waiting for documents or that they did not have a social security number or a passport to show, though the research also found that many financial institutions (13 out of 15) had flexible requirements. Undocumented immigrants often fear that banks could take their money or turn them over to immigration too.

Why do women need to bank?

The most basic benefits of banking can mean a lot of things for the unbanked low-income sector, in which the majority are women and immigrants. A bank account gives a person more control over his or her finances by providing a secure place to store and save cash. This provides a tool to help create budgets and schedule and track payments, which also creates various other financing opportunities and qualifies the account holder for benefits like health insurance, having a post-paid cell phone service, and other opportunities that require a credit history.

Speaking at TEDxWallStreet in 2013, Women’s World Banking President and CEO Mary Ellen Iskenderian shared a UN research team’s 11-year study of 600 households in Bangladesh that proved the power of a bank account. “There was a dramatically different outcome where the women had access to a combination of loans, a savings account in their own names and financial education,” Iskenderian said. “Both the women and their daughters vote regularly in local and national elections and even stand for election themselves to the village council.”

A bank account is more than a tool to save money and budget. Banking ultimately enables women to speak up and represent themselves — and to take responsibility for their own advancement.

When asked to comment about women’s banking here in New York, Gatchalian said, “I think the financial institutions we work with are way ahead of the banks here in the US in terms of realizing that women are a distinct client base and that more effort needs to be put into reaching them. Like our CEO says, there are one billion women around the world without access to financial services. There is nothing ‘micro’ about that.”

What women can do now

It is essential for women to realize the benefits of banking and other financial services available to them, regardless of income or residential status. Young women need to be educated and guided in order to be able to manage their money and future effectively. This includes encouraging women to discuss things like checking and savings accounts, debit cards, credit cards, and school financing amongst family and friends. It is also time for banks — especially in New York — to reach out to low-income women immigrants and start speaking in a language and terminology that they understand.
If you are interested in knowing more about how to manage your money and what financial tools are available for you, you can visit the New York City’s Office of Financial Empowerment website. They offer various products, readings, and seminars for everyone, especially the low-income sector. Gatchalian also suggests checking out New York Public Library’s financial literacy center.