The Unbanking of America: How the New Middle Class Survives

The failure of banks to meet the needs of the 99%—and the cottage industries filling the gap—are thoughtfully explored in this startling and absorbing exposé from Servon, a professor of city and regional planning at the University of Pennsylvania. As she describes, commercial banks now cater largely to the wealthy, and more Americans are turning to alternative financial services, including check cashers, payday lenders, and a variety of informal arrangements. To better understand the options available, Servon took jobs at RiteCheck, a check-cashing establishment in the South Bronx, and Check Center, a payday lender in Oakland, Calif. Surprisingly, she concludes that the seemingly predatory “shadow” banking system may simply be a reasonable (if inconsistently regulated) approach to customer demand. In layperson-accessible language, Servon explains the effects of banking regulations—both recent and historical—and of technological innovations in consumer financial services. Most notable is the breadth of people she finds who have removed themselves, or been removed, from the world of conventional banking, including those with chronically low income, students, and entrepreneurs. Required reading for fans of muckraking authors like Barbara Ehrenreich, this fascinating look at the future of money management insists that the ever-growing number of the “unbanked” are a sector deserving of respect and solid options. Agent: Adam Eaglin, Cheney Literary. (Jan.)