To be unbanked is to be under an economic disadvantage. It means that many people have to rely on fringe banking services, such as check- cashing outlets with high fees. These families and individuals are missing out on a critical component of economic opportunity. After all, building a nest egg is difficult to do if you do not have a nest. In the past few years, in recognition of this savings deficit, the im- petus of social policy has moved from that of entitlement to that of empowerment.
Saving is empowering.
It allows families to live without public aid, and provides them with a ladder into the middle class. It can actually change a family's economic station and set a better course for future generations. It may seem like a small thing, but it can have an enormous im- pact by encouraging federal benefit recipients to establish bank accounts, often their very first. It also encourages mainstream financial institutions to offer low-fee accounts to attract this customer pool. This changes the relationship between many low-income people and banks, ultimately to the benefit of both.