Stat of The Day: Quarter of Public Housing Residents Don’t Use Banks

Nearly one in 10 New Yorkers are “bankless,” the New York State Department of Banking estimates, and the numbers get worse as you move further down the income ladder. About one in four residents of public housing do not use banks, according to a report released by the City Council today.

The problem is not about people stuffing cash under mattresses.

“When your primary financial institution is a check casher, you have basically no ability to get a credit card, much less a mortgage–creating a permanent financial underclass,” said City Councilman Eric Gioia, who recently attracted a bank to Queensbridge Houses, the largest public housing development in the country.

Nearly three out of four public housing developments are closer to a check-cashing store than a bank, meaning more than half of New York City Housing Authority residents use expensive check-cashing services, whether or not they have a bank account.

The report offers a few remedies to expand access; chief among them is a recommendation that NYCHA rent more retail space to banks.

A NYCHA spokeswoman had not seen the report yet, but said the agency has introduced a new option for residents to selected branches of Carver Bank to make rent payments. She did not know whether the bank was making credit-reporting agencies aware of on-time rent payments, as the report suggests.

NYCHA has also introduced an on-line rent payment option. The spokeswoman did not know how residents without a checking account or credit card could make payments on-line. She put me on hold, logged on, and returned to tell me they make payments with checks.

Stat of The Day: Quarter of Public Housing Residents Don’t Use Banks