Being Unbanked, Part 1


Note from Katie Porter: This guest post is from Jennifer Song, senior staff attorney at the California Monitor Program. Jennifer pitched in and attended this workshop, and I hope Credit Slips readers will enjoy hearing about her experiences in a short series of posts. 

Last week, I, Jennifer Song, had the opportunity to join FinX/LA 2014:  Connecting to the Consumer Financial Experience.  Hosted by the Center for Financial Services Innovation as part of their three-day conference on consumer financial services,  FinX was an “in-the-field activity” that promised to give participants a “deeper understanding of the complexity of consumers’ financial lives in accessing financial services.” 

Upon arriving at the conference, we were placed into groups of four and given worksheets. The tasks to complete included cashing a personal check, cashing a pay check, purchasing a general purpose reloadable card and reloading the card, purchasing a money order, inquiring about auto title loans, etc.  We were given a little over two hours to complete these tasks in lower income areas throughout Los Angeles. With only a quick slideshow of interesting facts and a pep talk, we set off on our journey. 

While I will share my experience and how it shaped my thinking on low-income banking, I want to start by identifying factors that may have prevented me from fully experiencing and understanding the challenges facing the under banked and unbanked. PhotoFirst, we were traveled in groups of four; most people using these services do not travel in packs or with an entourage, and are not able to consult each other about transactions.  Second, while we were told to “dress down” in order to “blend in” while performing these transactions, I do not believe we were fooling anyone at the shops we visited.  Third, and perhaps the most glaring contrast, was that we were chauffeured around Los Angeles in a town car to perform these transactions. While I assume there is access to public transportation in or around these financial centers, Los Angeles is notorious for being difficult to navigate via the public transportation system (did you even know it has a subway?) Many of the financial centers were clustered together but major banking institutions were noticeably absent in these areas. 

Our group visited four different financial centers (as well as a 7-Eleven with a Money-Gram kiosk and atm) in our allotted time, with the help of our driver and car.  This may be a spoiler, but even with our transportation covered and as a group of educated adults working together, we were unable to complete all of our tasks. Our outing took place in the late morning through the early afternoon.  Even during these “off times,” our transactions took up to thirty minutes to process.  For those who work and can only visit these after working a full day, the waiting time must be much longer. The interiors of the financial centers themselves were striking.  The pay day lending and check cashing businesses were very sparsely furnished.  There were no seats for patrons to use while waiting; instead customers were expected to form long queues and wait quietly.  Once a customer was able to make their way to an agent, they had to speak to the agent via a glass or plastic shielded window.  There was a clear division between the customer and the agent. Neither side ever crossed the divide. That physical divide is symbolic of the difficulty in exposing policymakers to the real-world challenges faced by the unbanked and under banked community.