Lack of Credit, Banking Access Is a Huge Problem, Our Expert Tells Lawmakers

More than 7 million U.S. households have neither a checking nor a savings account, and 26 million don’t have a credit history, Lori Trawinski, director of finance and employment at AARP Public Policy Institute, told the Senate’s Special Committee on Aging during a hearing last week. She warned that lack of access to credit and the financial system threatens Americans' independence as they age.

Some of the unbanked pay for goods and services with cash. Others rely on high-cost lenders to borrow money, using payday loans or other costly products.

“When people lack access to the mainstream banking system and credit, they end up paying more to conduct transactions and borrow money,” Trawinski said in her prepared testimony.

She was one of several experts who spoke with lawmakers about how to make the U.S. more financially inclusive. Trawinski also spoke to the need to protect people from financial exploitation and scams, saying that older adults’ increasing use of technology could help close the financial gap.

Read Trawinski’s prepared remarks, or watch a recording of the hearing.