Lieu Chairs Banking and Finance Hearing on “The Unbanked”

Sacramento, CA – Assemblymember Ted Lieu (D-Torrance), the Chair of the Assembly Banking and Finance Committee, today held a hearing on the “unbanked,” those who do not have an account in a financial institution.

According to the US Census, 28% of adults in California currently do not have a checking or savings account, and they are disproportionately low-income and minority.  The unbanked lack access to traditional mainstream banking, and thus often turn to payday lenders, check cashers, and other services which can charge higher fees than banks. 

Moreover, many of these people keep large amounts of cash on their person or in their home, leaving them susceptible to losing their entire life savings to fire or theft. 

“This is a national crisis,” Lieu said.  “The unbanked can’t access the very services needed to create wealth and climb out of poverty – savings, loans, and lines or credit.  Being unbanked keeps them in the cycle of poverty.”

During the hearing, the committee heard testimony from a wide range of experts, including Jose Cisneros, the Treasurer for the City of San Francisco, policy analysts from the Brookings Institute and the New America Foundation, and representatives from several banks and credit unions.

To address the problem of the unbanked, Lieu has introduced AB 1502, which would establish banking development districts.  These districts would incentivize banks to move into underserved geographic areas, giving low-income areas access to traditional banking services.  The bill is patterned after a successful program in the State of New York.