Connecting Renters to Banking Services
According to a Federal Deposit Insurance Corp. (FDIC) survey, an estimated 5.9 million U.S. households were “unbanked” in 2021, meaning that no one in the household had a checking or savings account at a bank or credit union. The FDIC also found that 18.7 million households were “underbanked,” meaning households that had a checking or savings account and used financial products or services outside of the banking system, which often have transaction costs (i.e., check cashing, payday loans, pawn shops, etc.). It also found that unbanked rates are higher among lower-income households, less-educated households, Black households, Hispanic households and working-age households with a disability, which are disproportionately renters.
Multifamily property owners and operators can help support the financial stability of renters and their ability to efficiently make rental payments by assisting their efforts to locate banking resources. A few examples could be:
- Connecting Tenants to Traditional Financial Resources
Connect unbanked tenants with financial capability resources and institutions. This could include providing resources tenants can use to become more financially responsible or establish a relationship with a banking institution. - Allowing Rent to be Paid at a Local Retailer
Some retailers offer services that allow tenants to pay their rent with cash. Money is transferred into the landlord's bank account, which makes the process much easier for the landlord. Tenants would also have the flexibility to pay whenever the retailer is open. - Leveraging Funding Streams
Local nonprofits may be able to provide financial support depending on local or state regulations or if a household lacks certain documentation, which creates obstacles to banking access. - Partnering with Firms that Offer Banking Innovations
Certain firms provide platforms to renters that facilitate rental payments and provide innovative banking services. Properties interested in partnering with these firms should consider whether there are any costs to tenants, any fees associated with banking services, and other aspects of the banking services including rewards and savings rates.
Lenders, sponsors, and multifamily operators have a great opportunity to engage with their partners, communities and local banks to explore resources available for residents. By supporting the financial capability of renters, you’re helping to support a stronger multifamily industry.
Discover more ways to support renters and open doors to new possibilities.