Why Native Americans Have Biggest Unbanked Population

Number of the Day: The most relevant or interesting figure in personal finance


The Balance

That’s the average number of miles between the center of a Native American reservation and the nearest bank branch—and one reason the American Indian and Alaska Native communities commemorated Monday are the most likely demographic to be unbanked, advocates say. 

Considering the average rural consumer has a bank branch 4.3 miles away, the 12.2 miles—a 2013 finding from the University of Arizona’s Native Nations Institute—puts Native Americans at a distinct disadvantage, according to a recent report by the National Indian Council on Aging, citing research showing people who grow up in areas lacking access to banks are less likely to have a credit report and more likely to have a lower credit score. Indeed, not having a bank account can be much more than just an inconvenience. It can make it harder and more expensive to borrow money and avoid fees.  

Monday, traditionally known as Columbus Day, is now also known as Indigenous Peoples’ Day—a day to celebrate the contributions and resilience of American Indians, Alaska Natives and Native Hawaiians.

More than 16% of American Indian and Alaska Native households had neither a checking or savings account in 2019, three times the national average and the most of any race or ethnicity broken out by the Federal Deposit Insurance Corp.

Have a question, comment, or story to share? You can reach Julianne at jslovak@thebalance.com.

Article Sources

  1. Federal Reserve Bank of Cleveland. “Has Bank Consolidation Changed People’s Access to a Full-Service Bank Branch?” Download PDF and see page 4.

  2. SSRN. “Growing Up Without Finance.”

  3. National Indian Council on Aging. “Native Households Have Highest Unbanked Percentage.”

  4. Native Nations Institute. “Access to Capital and Credit in Native Communities. A Data Review.” Page 5.

  5. White House. “A Proclamation on Indigenous Peoples’ Day, 2021.”

  6. FDIC. “How America Banks: Household Use of Banking and Financial Services.” Table 3.1 Page 13.