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The Unbanking of America: How the New Middle Class Survives

3.96  ·  Rating details ·  654 ratings  ·  114 reviews
An urgent, absorbing exposé—why Americans are fleeingour broken banking system in growing numbers, and how alternatives are rushing in to do what banks once did.

What do an undocumented immigrant in the South Bronx, a high‑net‑worth entrepreneur, and a twenty‑something graduate student have in common?All three are victims of our dysfunctional mainstream bank and credit
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Hardcover, 272 pages
Published January 10th 2017 by Houghton Mifflin Harcourt
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Andrew Smith
Jan 10, 2017 rated it really liked it
As someone who spent his whole working life in the employ of a large retail bank in the UK, the title of this book intrigued me. How could anyone considered to be middle class (almost regardless of the precise definition) survive without using a bank? Well, in this book Lisa Servon (Professor of Urban Policyan at Milano School of International Affairs) delves deep into the issues confronting potential bank customers in America today. She starts by stating that there are, in essence, three ...more
The Pfaeffle Journal (Diane)
Feb 22, 2017 rated it really liked it
Shelves: 2017
The Unbanking of America: How the New Middle Class Survives was very interesting, I like many people look at check cashing and payday loan operations as near criminal. Lisa Servon, begs to differ, she takes us on a imitate look at how these companies function with the communities they serve. We have been led to believe that check cashing and payday loan stores are just a step above mob loan sharks. The author paints a totally different picture of how these operations function within their ...more
Jen
Feb 18, 2017 rated it it was amazing
Shelves: netgalley
Wow. That's all I have to say. Banks and credit card companies are possibly more evil than payday lenders and check cashiers, despite what the media says. Who knew?

Well, if you believe the media, I have a bridge to sell you. But I digress.

Now, just to be fair, the author isn't saying banks and credit card companies are evil, just that they are no longer customer oriented and more profit oriented. Which in my book, IS evil, especially when the profits come from screwing over customers, especially
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Biblio Files (takingadayoff)
Dec 18, 2016 rated it it was amazing
Any thoughts on payday loan stores? I had it all figured out, that they are a scourge that should be eliminated immediately. Then I read The Unbanking of America, and I had to change my mind. First off, Lisa Servon differentiates the payday loan providers from the check cashing and money wiring services. In many states, payday loans are illegal and the storefront stores that cash checks also transfer funds, print money orders, and do other legitimate services for a clearly posted fee. Many ...more
Mary Little
Jan 11, 2017 rated it it was amazing
It's not often you find a book that educates while delivering a strong, personal narrative. The author shows how the banking industry has become a haven for the wealthy and through her own personal experiences working at a check cashier and payday lender introduces us to middle class Americans who find it cheaper and easier to pay fees for check cashing rather than open up a checking account.
Great read. Made me angry and helped me think. Gave me great ideas for how to improve my own banking
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Greg Strandberg
Oct 24, 2017 rated it really liked it
Shelves: business
I got this book from the library and read about a third of it.

What’s interesting about Servon’s approach is that she actually got a job as a teller at RiteCheck, which is a check cashing service in the South Bronx.

“Before working as a teller, I assumed that mainstream and alternative financial services were separate,” she writes in the introduction to the book. “I soon learned that the reality is much more complicated.”

And so the book begins its course, charting how the banks consolidated,
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Rachel Blakeman
Jan 28, 2017 rated it really liked it
This is really a 3.5 rating. I learned of this book when the author was interviewed on Fresh Air. The first half of the book is great, chronicling her time working in the alternative financial services market. It was really insightful to learn why people, acting as rational actors, use check cashers and payday lenders. Also glad to see she covered immigrant communities' financial practices.

I usually criticize books for not offering solutions to the problems they highlight. However it was
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Ian Robertson
Feb 11, 2018 rated it really liked it
In 2000, Robert Putnam wrote Bowling Alone, which traced the decline of an integrated American society into one of segmented and stratified sub-societies. This book continues that vein by looking specifically at its impact on financial services.

According to Lisa Servon, a professor of city and regional planning at the University of Pennsylvania, "more than one million people with low incomes have been deemed ineligible for bank accounts" by the credit scoring system. For this and other reasons,
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Athan Tolis
May 02, 2017 rated it it was amazing
The Unbanking of America is better than a treatise on US consumer financial services has any right to be.

Author Lisa Servon, a university professor, has dedicated a large part of her life to this book, exploring “unbanked” America from every possible aspect: the data (which she found inadequate), the literature (often straight from the author, such as Sudhir Venkatesh of Freakonomics fame), the history of the relevant regulation (again, under the guidance of experts), a survey of fintech
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Nathan
Feb 09, 2017 rated it it was amazing
Lisa Servon’s timely new book, The Unbanking of America, explains how and why Americans are using “alternative financial service providers” to circumvent traditional banks. The how is told through her engaging first hand account of working at check cashers and retail payday loan establishments. Thy why is basically…half of America is broke, and millions of Americans do not have bank accounts.

When you have to pay your construction workers, but can not wait until the money is transferred into your
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John
Jun 19, 2017 rated it really liked it
Solid deep dive into why millions choose to spend what might seem to be crazy interest rates on check cashing and payday loans (they get money faster and are cheaper than mainstream banks with shady hidden fees).

I love the hands on approach and interviews to help dig into the problem with real life examples. I liked the overview of various new approaches companies are trying to solve some of the problems as well.

I'm not as convinced on the regulatory solutions proposed though as it seems
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David Quinn
I was drawn to this book by its title, cover picture (a jar of loose change will always get me to at least take a closer look) and its availability on my library's e-lending system.

It's not a polemic against major banks and credit unions (maybe more of a mild rebuke) so much as an insight into alternative financial systems (check cashing stores, payday lenders, tandras/ROSCAs, digital wallets and the like). This is the book's strength. Servon is an academic/researcher and she explains these
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Ben Hamelin
Aug 19, 2017 rated it liked it
An interesting account of alternative financial options, why they're used, who's using them, and a breaking of the stigma that surrounds some of these services (payday lenders, check cashers). Highlighting how corporate financial big banks have left behind many consumers (not to mention screwed them over), and also highlighting some newer players in the alternative finance sector. This was a fairly easy read, with some interesting facts and observations, I wouldn't strongly recommend it but if ...more
Shivesh
May 22, 2017 rated it liked it
Unbanking is a term that is pregnant with meaning in the new America, where we have entered the beginnings of a post-capitalist state. Much like how Deconstructionism has overtaken the Post-modernist movement in the last century, capitalism as an ideology has been deconstructed into its component parts in this century. Now economic issues dominate the headlines and modern journalism has taken a turn toward long form sociological studies such as that contained in this book.

All things considered,
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Rt
Jun 16, 2017 rated it it was amazing
The new middle class that Servon describes isn’t, really. That is, its members may have good incomes, but even if they do they lack significant savings or other wealth, and often job security as well, and thus they are vulnerable to sudden shocks. Servon talks to one man whose database of consumers with subprime credit scores included many with relatively high incomes, college degrees, and homes in their own names; seven years ago, the people in his database experienced a “destabilizing event”— ...more
Tim
Jul 16, 2018 rated it it was amazing
Wow! Servon delivers so many insights into the ways we use money and ways to improve our choices. She asks real people real questions and delves into the choices they have and their decisions. She explores why we have so few choices and explains some ways to solve the underlying causes. If you only think "the poor" are suffering from income insecurity, you need to read this.
Kari
Jan 25, 2017 rated it really liked it
Overall, I enjoyed her perspective and information. Parts of the book were a tad dry. And other parts were very biased. But I did enjoy tremendously her description of working in the check cashing and payday loan environments and the stories she was able to convey. Overall, I would recommend.
Bob Croft
May 25, 2017 rated it did not like it
I run a janitorial firm in the Phoenix area. For better than 30 years, we've been based on small, usually owner-operated independent contractors for much of our small client work. They're straight, down to earth hard working folks, often immigrants or their children, trying to make a decent living for their families. Good people.
I've noticed that quite a number of them use check cashing firms to cash their monthly payments; it's seemed to me, repeatedly, that the couple of points charged, plus
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Derek
Jun 29, 2017 rated it really liked it
This was an impulsive grab while at the library. It was not on my reading list, but the subject was right in line with things I've been interested in learning more about. I'm glad I picked it up. Servon has provided a very good, brief examination of the state of the financial industry's service to the broad public, including the alternative financial services that are so often reviled (payday loans and check cashers) and informal financial service arrangements.

I find it interesting to see how
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Rahul
Dec 03, 2017 rated it it was amazing
This book documents the uncomfortable truth that nobody seems to be talking about. Set in the United States, it talks about the underbanked population. How people have lost faith in the big banks and how big-banks are solely focusing on the rich, trying to make good quarterly numbers thus leaving the less-well to do outside the system. And once you’re outside the system – the maze of credit ratings and credit-worthiness makes a person’s life doubly hard.

As the biggest banks have grown larger and
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Steven
Jul 16, 2017 rated it it was ok
In The Unbanking of America, Lisa Servon, a professor of urban planning, takes a dive into alternative financial services. I admire her thoroughness. This book records her time working for check cashing companies and payday lenders, her experience volunteering for a financial help hotline for those wishing to escape aggressive payday lenders, as well as her assistant's experience participating in a neighborhood savings club.

This book has one important observation: people who use these services
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D.L. Morrese
Nov 17, 2017 rated it really liked it
Taking jobs at a check cashing service in New York, and at a payday lender in California, a professor at the University of Pennsylvania (and a writer and lecturer on consumer financial services) attempts to obtain some ground truth on the plight of financially insecure Americans.

I think it comes as no surprise that a great many Americans are struggling financially. The economy isn't what it once was. Adjusted for inflation, wages have declined since 1972. Secure jobs with benefits are relatively
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Jennifer
Apr 12, 2019 rated it it was amazing
Shelves: non-fiction
This was a fascinating book about alternative financial services and the current state of the banking/financial services industry in the US. I was impressed at how much information the author managed to present in a relatively short book considering the complexity of our financial system. At the same time, the information was easily accessible and almost compulsively readable, quite a feat given the apparent dryness of the topic.

To gain exposure to alternative financial services, the author (a
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Vinay Badri
Sep 03, 2017 rated it really liked it
A pretty interesting viewpoint on how the middle class (as its defined here) in the US has moved away from banking to other forms - not necessarily cos the other forms offer better and more relevant services (they do) but due to the fact that bank are increasingly looking to focus on well-off, wealthy customers

As someone part of this industry and possibly someone who is able to view things from the entire prism of digital, it was indeed an interesting read looking into what goes into people
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Stephanie R.
Dec 13, 2019 rated it really liked it
I always thought those payday loan and check cashing places were a bunch of crooks taking advantage of poor people. Butthisbookshowsyou the big banks are the real crooks. Lisa, the author, gets a job in a check cashing place and she learns that the check places offer the same friendly personal service that banks used to do for my parents (and no longer do now). Furthermore they are so clear with their fees and there are no surprises. I admit I used to think overdraft fees were just for ...more
Steven Jones
Feb 11, 2017 rated it liked it
This book is one that had a ton of promise but falls short of delivering. There are some good parts where you learn about why people use these services and start to identify more with the people of the communities that are serviced by alternative banking services. However it also falls short in some areas.

For one the book is pretty short, with a large part at the end being a bibliography which is fine, but the book kind of ends abruptly. Some of the services described at the end as solutions
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Russ Adcox
Mar 14, 2017 rated it it was amazing
Shelves: social-issues
Eye opening and thought provoking. I've been bothered by the rise of payday lenders in my community and looked at many solutions for curbing their growth (from crusading against them to lobbying legislators for increased regulations to creating alternative lending options). This book explained why these lenders have grown so quickly and how they service a population that most banks won't touch. Turns out the issue is way more complex and nuanced than I first believed. It's not as simple as ...more
Uwe Hook
Mar 17, 2018 rated it really liked it
There's little understanding among the general public, or even our policy makers, on the growing role payday lenders and check cashing businesses are playing in America. It's not just poor people using these services. Growing numbers of the middle class are also using them. The Unbanking of America provides an in-depth look at these people and services. It also highlights why people use these services instead of traditional banks. This book is well worth reading for anyone interested in income ...more
Matt
Jan 10, 2017 rated it it was ok
I didn't actually finish because this book was a bit unbearable to read. Servon's stories about working in payday loan and check cashing places were very interesting. Also, this book makes me think about people whose lives I really have no experience with. For that, I think it's good.

But the overwhelming tone is, "Someone else is causing my problems and they should fix it." And that drives me nuts. I don't dispute the claim that other people (including the government and other institutions) can
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Eric
Jun 08, 2017 rated it it was ok  ·  review of another edition
The subtitle, "How the New Middle Class Survives" probably ought to have been the main focus of the title, and that is less than totally accurate. Servon worked hard at understanding how those who no longer go to banks conduct their financial dealings, but I would make the case that her subjects were aspiring, but not yet quite in, the 'middle class.' Plus, with "Unbanking" in the title I would like to better have understood what, and how, specific services the traditional banks had conducted ...more
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“Some banks, like Wells Fargo, offered payroll-advance loans for a while. But once the media reported that these loans were basically the same as payday loans, the banks stopped offering the products. The risk to their reputation was too great. Of course, banks do offer all of us a short-term loan. It’s called an overdraft, and if it had a repayment period of seven days, the APR for a typical incident would be over 5,000 percent. Americans paid $38 billion in overdraft fees in 2011, more than they paid to payday lenders.” 0 likes
“Historically, banks made their money by borrowing and lending, which generated interest income. But events like the savings and loan crisis in the late 1980s and early 1990s, when so many banks failed, illustrated how disastrous that model could be. In order to make banks less vulnerable to volatile interest rates, bank examiners encouraged them to find other ways to make a profit. That’s when banks discovered fees—the fees that anger and frustrate nearly everyone I’ve spoken with.” 0 likes
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