As a Community Development Financial Institution (CDFI) seeking to provide affordable and accessible financial services to Arkansans and Mississippians, a recently released FDIC survey on unbanked and underbanked households in America caught our attention. The study breaks down the rates of unbanked and underbanked households by state as well as providing information on rates of savings account ownership and usage of prepaid debit cards and mobile financial services.

For background, the FDIC defines “unbanked” households as not having a checking or savings account, and “underbanked” households as those having a checking and/or a savings account but using alternative financial services, such as non-bank money orders, non-bank check cashing services, payday loans, rent-to-own services, pawn shops or others in the past 12 months.

While still higher than the national average of 7.7 percent, Arkansas’s unbanked rate was stable over the last two years at 12.3 percent. Further, the underbanked rate decreased from 28.1 percent to 25.7 percent, which is exceptionally noteworthy because of its significant increase from 22.3 percent in 2009 to 28.1 percent in 2011. In Mississippi, the unbanked rate decreased 0.6 percent from 15.1 percent in 2011 to 14.5 percent. However, Mississippi’s underbanked rate took a turn for the worse: the percentage of underbanked households jumped from 23.8 percent in 2011 to 32.8 percent.

  Unbanked, 2011 Unbanked, 2013 Underbanked,  2011 Underbanked, 2013
Arkansas 12.3% 12.3% 28.1% 25.7%
Mississippi 15.1% 14.5% 23.6% 32.8%
U.S. 8.2% 7.7% 20.1% 20.0%

Source: FDIC, 2014.

In addition to the unbanked and underbanked rates, the FDIC’s findings on the increased usage of prepaid debit cards and mobile banking are also of interest. In Arkansas, 10.2 percent of households used prepaid debit cards in the last 12 months; in Mississippi, the rate of prepaid debit card usage is 14.9 percent. Unbanked households had the highest rate of usage of prepaid debit cards, whereas underbanked households are more likely to use mobile financial services than fully banked or unbanked households.

So what does this mean for Southern? Arkansas and Mississippi are both relatively poor states, so higher unbanked and underbanked rates are not surprising as the FDIC survey shows there is a strong negative relationship between lower-income households and ownership of a bank account. But as a CDFI, Southern works to extend the availability of credit and capital to everyone, and provide responsible, fair financial services to its customers. As demonstrated at the national level in the FDIC survey, 35.6 percent of unbanked households reported the main reason for not having an account was insufficient money to meet minimum balance requirements, and 34.1 percent of households that recently became unbanked experienced either a significant income or job loss they said contributed to becoming unbanked. To help alleviate financial stress amongst our customers, Southern currently offers several different kinds of accounts with no service fees and no or low minimum balance requirements.

To learn more about Southern’s efforts to reach unbanked and underbanked households and create economic opportunity in Arkansas and Mississippi, please contact Meredith Covington, Policy & Communications Manager, at

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