Most Americans give little thought to the financial system that enables them both to manage their day-to-day finances and to plan for the future. They take it as a given that they have a safe and affordable place to deposit their paychecks, pay their bills, and save for a rainy day and retirement. But as many as 22 million U.S. families—most of them earning less than $25,000 per year—are unbanked, meaning they lack a basic checking or savings account. Millions of others, the underbanked, have a bank account but are not fully integrated into the banking system. They may pay more for basic financial services to an array of alternative financial service providers, including check cashers, payday loan providers, pawn shops, auto title lenders, and rent-to-own stores. These alternative providers may charge high fees, as well as have business models or payment plans that can trap users into a spiraling cycle of debt.

The most significant consequence of our increasingly two-tier financial services system is that large numbers of Americans lack the tools they need to save, build assets, and become part of what President Bush calls “the ownership society,” a nation in which citizens—through saving their own money in safe and often tax-benefited accounts—enhance their ability to weather emergencies and to make their own decisions regarding college, retirement, homeownership, and health care.