To help banks and others interested in meeting the financial services needs of low- and moderate-income households learn more about the financial behavior and preferences of low-income consumers, ShoreBank Advisory Services, a business of ShoreBank, with the support of the Fannie Mae Foundation, Ford Foundation, MacArthur Foundation and Annie E. Casey Foundation, conducted a large survey of households in low and moderate income neighborhoods of Washington, D.C., Los Angeles, and Chicago with two central questions in mind. First, what are the most important reasons why so many low- and moderate income households do not hold a checking or savings account? Second, to what extent do households with bank accounts also participate in the alternative financial sector, and in what ways are unbanked households connected to the mainstream financial sector?
The survey utilized a multistage stratified random sampling design in which census tracts were stratified by city, race/ethnicity, and income. Survey households were drawn from 63 low and moderate-income tracts, 21 tracts in each of the three cities. Approximately 500 households were surveyed in each city, for a total of 1,532 interviews About two-thirds of the interviews were conducted by telephone, and one-third in person. All respondents were offered the opportunity to complete the survey in Spanish, and 10% chose to do so. In each household, the survey was administered to the person identified as being responsible for most of the financial decisions. The overall response rate for the survey was 48%, with a higher response rate for in person interviews. The survey was conducted from August 2003 to January 2004.