The Unbanking of America

The Unbanking of America examines why millions of Americans are turning away from traditional banks and toward alternative financial services like check cashers, payday lenders, and pawn shops. Lisa Servon, a professor who worked at a check casher in the South Bronx, documents her firsthand experiences in these businesses. Servon follows workers and customers across the alternative financial sector to understand their choices and challenges. She investigates how factors like bank fees, minimum balance requirements, and predatory practices have pushed many working Americans out of mainstream banking. The research spans different regions of the United States and includes analysis of fintech startups, informal lending circles, and economic trends since the 2008 financial crisis. Through interviews and data, Servon builds a comprehensive picture of how Americans manage their money when traditional banking fails them. The book challenges common assumptions about financial services while highlighting deeper issues of economic inequality and the changing nature of work in America. It raises fundamental questions about who the current banking system serves and what true financial inclusion would require.

Readers found this to be an insightful examination of alternative financial services used by lower-income Americans. Many valued Servon's firsthand experience working at check cashing services and payday lenders. Readers appreciated: - Clear explanations of why people choose check cashers over traditional banks - Personal stories that humanized users of alternative financial services - Balanced perspective that avoided demonizing either banks or alternative services - Data-driven analysis combined with on-the-ground observations Main criticisms: - Limited solutions proposed for the problems identified - Some repetition of key points - Focus primarily on urban areas, less coverage of rural communities Ratings: Goodreads: 3.9/5 (1,100+ ratings) Amazon: 4.4/5 (140+ reviews) Representative review: "Eye-opening look at why traditional banking fails many Americans. The author's willingness to work these jobs herself adds credibility to her analysis." - Amazon reviewer Source ratings and review counts verified February 2024

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📚 Before writing this book, author Lisa Servon worked as a teller at a check-cashing store in the South Bronx and at RiteCheck to gain firsthand experience of alternative financial services. 💰 The average payday loan customer takes out eight loans per year and spends approximately $520 on interest to repeatedly borrow $375. 🏦 Nearly 30% of Americans are either unbanked (no bank account) or underbanked (using alternative financial services despite having a bank account). 📊 Check-cashing businesses often charge lower fees than traditional banks for bounced checks and overdrafts, making them a more economical choice for many low-income customers. 🔍 The author discovered that many people who use alternative financial services do so not from lack of financial literacy, but because these services provide more transparency and predictability than traditional banks.