Only Half of Americans Feel Like Banks Can Help Their Financial Progress
April 24 2018 - 8:30AM
Business Wire
Non-prime also feel that banks lack relevant
products, says CNMC study
When it comes to getting a loan or credit card from their bank,
many Americans are not so confident. A newly released study from
Elevate’s Center for the New Middle Class (CNMC) found that
non-prime Americans – the 2/3rds of US adults with credit scores
under 700 – were significantly less likely to depend on a
traditional financial institution for access to credit. Compared to
individuals with prime credit scores, non-prime Americans are:
- 4x as likely to have been denied a loan
over the last year
- 8x as likely to not use a bank
- 6x as likely to use an online-only
financial institution
- 21% less likely to believe their
financial institution has products designed for them
- 48% less likely to believe they would
be approved for a personal loan
“Unfortunately, this study indicates what so many Americans
experience every day. When faced with a hurdle in their financial
journey, the non-prime simply do not have the option of relying on
a bank or traditional financial institution as a backstop,” said
Jonathan Walker, Executive Director of the CNMC. “Across the board,
we see that the non-prime have little confidence a bank can provide
for them, yet surprisingly most indicate a bank would still be
their first choice for a personal loan.”
The non-prime are often characterized by income volatility,
making it all the more necessary they have access to credit. Yet,
one in 12 non-prime Americans do not even use a traditional bank
for their day-to-day needs. Non-prime Americans often move to an
online only bank to meet this void.
“For centuries, we have relied on banks to meet our financial
needs – both big and small. Today, many Americans do not have that
luxury. With the changing regulatory environment, banks may finally
be able to serve this population again, either by partnering with
financial technology companies, creating innovative new products,
or by finding new means of underwriting their financial products,”
said Walker.
About the Research
This study represents results from a survey of 1005 U.S.
consumers (595 with prime and 298 with non-prime credit scores).
Interviews were conducted February 2, 2018 through February 5,
2018.
About Elevate’s Center for the New Middle Class
Elevate’s Center for the New Middle Class conducts research,
engages in dialogue, and builds cooperation to generate
understanding of the behaviors, attitudes, and challenges of
America’s growing “New Middle Class.” For more information,
visit: http://www.newmiddleclass.org
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