Living without banks: many Americans prefer alternatives to traditional banking.

• Author: Tuccille, J.D.
• Position: Lisa Servon's "The Unbanking of America: How the New Middle Class Survives" - Book review

MY PARENTS OPENED my first savings account for me when I was seven," Lisa Servon writes at the beginning of The Unbanking of America: How the New Middle Class Survives. "The teller gave me a green Pulaski [Savings and Loan] passbook with gold lettering. It made me feel important, like I'd crossed some threshold and joined a club that bigger kids and grownups got to be a part of."

Clearly nostalgic for her rite of passage, Servon, a professor of city and regional planning at the University of Pennsylvania, sets out to discover why that experience has become alien to so many modern Americans, and what practices and services they've adopted to replace banks in meeting their financial needs. She speaks with experts, entrepreneurs, and people trying to make ends meet, and she even takes jobs at a check-cashing store and a payday loan business. She concludes that banks as currently constituted aren't a good choice for everybody, and that many alternatives--including some options widely reviled by pundits and politicians--do a better job of serving many people's needs.

The numbers of Americans who either don't have bank accounts (the "unbanked") or use them sparingly alongside alternative financial services (the "underbanked") can be startling if you were raised on bank robber Willie Sutton's apparently apocryphal wisdom that "that's where the money is." "As of 2013, the year of the [Federal Deposit Insurance Corporation's] most recent survey, approximately 8 percent of Americans were unbanked and another 20 percent were underbanked," notes Servon.

The 2015 survey, released after her book was written, finds nearly identical numbers, but alienation from the banking system is even more remarkable in some major communities. In 2015, the Albuquerque Journal found that 11 percent of area households had no bank accounts, while 24.4 percent kept one account while also using alternative services. Likewise, in 2015 The Kansas City Star reported that 12 percent of local households--and 45 percent of local African-American families--completely avoided banks.

Why do so many Americans shun the institutions traditionally devoted to saving and loaning money? The answer, many people tell Servon, is that banks don't seem to want their business and make it too difficult and expensive to get anything done.

"Banks want one customer with a million dollars," the owner of one check-cashing chain tells her. "Check cashers like us want a million customers with one...