Documentary shows cost of being unbanked


USA Today
By: Hadley Malcolm
June 9, 2014

NEW YORK -- To find out what it's like to be one of the 70 million Americans who don't have access to traditional banking services, American Express executives dispersed across the streets of New York City in February.

They went to check-cashing services, such as Pay-O-Matic, and wire-transfer locations, such as MoneyGram.

After waiting in line to cash a check, Dan Schulman, group president of enterprise growth, was told he would have to go to a different location that would be willing to accept a check made out to Dan Schulman, when his I.D. says Daniel Schulman. To send his daughter money in Boston, Schulman not only had to go in person to make a wire transfer -- and wait in another line -- but his daughter had to go in person to a wire-transfer location in Boston to collect the cash. Plus, he had to pay a fee to send the money.

"What I didn't realize was how time-consuming the process was," Schulman says of what the underbanked go through to access their money. "It is practically like a part-time job."

It was his and the others' experiences that led, in part, to American Express sponsoring the documentary Spent: Looking for Change, premiering this month online, with screening events in Los Angeles and New York featuring panel discussions about how to create a more inclusive banking system. The film, which runs about 40 minutes, can be viewed for free at

Company executives say they were motivated to get involved, and provide more services to the unbanked, to not only expand its customer base, but reposition its value for Americans, who have traditionally viewed American Express as an exclusive brand.

"We have an existing network in place," Schulman says. "If we can provide a benefit and make money, it's a chance for us to expand the population of customers we serve, expand the products we put in the marketplace, and reinvent ourselves going forward."

The film follows a young couple trying to buy their first home, a young woman attempting to start her own business, a single mother looking for work while trying to keep her daughter in private school, and a family struggling to pay the bills after the father is diagnosed with multiple sclerosis and can no longer work.

All the individuals were pushed out of the financial system somehow -- over drafting their accounts too many times while trying to pay bills, having so much student loan debt they can't qualify for a loan, unable to get ahead of past mistakes that lowered their credit scores, unexpectedly losing a job, having to care for an aging parent -- and found themselves turning to check-cashing services or payday lenders to get immediate access to cash.

Those services often come with fees, and interest rates can be as high as 300%, Schulman says. That can mean paying the fee to renew a payday loan, for example, is more manageable than actually paying off the loan in full. One family featured in the film ends up owing $1,700 in fees on the original payday loan of $450.

"We all have people who are literally one life shock away from going into a crisis," Schulman says. "For many of us, we have a buffer in one way or another. We have a savings account, or we have credit that we can go to. The underserved don't have that luxury."

The goal of the film, Schulman says, is to raise awareness about how much is being lost in fees and interest that the underbanked pay to alternative services to access their money -- $89 billion in 2012, according to the Center for Financial Services Innovation -- and to encourage a national conversation about how to address the problem.

American Express already offers products meant to serve customers who don't have regular bank accounts, including a partnership with Wal-Mart to offer its Bluebird prepaid card. That and another option called Serve come with practically no fees, as long as users put money on their cards at least once a month. They also give the underbanked access to digital services such as electronic bill pay, mobile check deposit and transfers between friends.

American Express' strategy comes down to relying on software and mobile technology to reach fringe customers, instead of the costly physical branches that traditional banks have been built around. The company is partnering with non-profits to pilot a program that will bring financial mentoring to high school students in a Mississippi town where nearly half the population is considered underserved financially. The program will also help install free Wi-Fi for the entire community and opportunities to access financial services through mobile phones.

The hope is to expand the program to other communities if it's successful. American Express is also looking at how to better serve members of the military transitioning back into civilian life.

"Managing and moving your money should be a right, not a privilege," Schulman says. "This isn't about banking the unbanked. It's about re-imagining what consumer retail banking can be."

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This page contains a single entry by CFED published on June 11, 2014 3:15 PM.

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