Stimulus Checks: Why Those Without Bank Accounts Are Facing Delays

Millions of Americans do not have traditional bank accounts, meaning they are facing delays in receiving their coronavirus stimulus checks. Without banking information to give the IRS when filing taxes, they could not have their payments direct deposited. This means those without bank accounts must wait for the physical checks, which have not been delivered as quickly as the direct deposit payments were last month.

The House Ways and Means Committee estimated that only about 5 million paper checks will be mailed each week, according to a memo obtained by the Associated Press. The payments are part of the $2.2 trillion CARES Act Congress passed in late March. The payments include $1,200 for an individual taxpayer, or $2,400 for joint tax filers. Another $500 is added for dependents under 17. While millions of Americans already received the one-time payment in mid-April, getting the physical checks out has been a slower process.

About 8.4 million households are "unbanked," which means no one in the household has a bank account, according to a 2017 estimate from the Federal Deposit Insurance Corp., the AP reports. Another 24.2 million are "unbanked," meaning that someone in the household might have a bank account, but members of the household use other means for financial services like money orders, pawnshop loans, payday loans and cashing checks.

Those who use these services often end up paying higher fees, meaning they lose a chunk of the money they have earned. The services are often criticized as being predatory to the black and Hispanic communities, since they are more likely to be unbanked. About 17% of black households and 14% of Hispanic households did not have bank accounts in 2017, while only 3% of white households were unbanked at the time, according to the FDIC.

"They charge you an arm and a leg," Ta'Mar Bethune, a 41-year-old mother of four who still cannot get a bank account after she was the victim of identity theft, told the AP of the alternate check-cashing services. "You never get your full money. It's bad, but I have no other choice."

Even if you get your check cashed at Walmart, there is still a servicing fee. As Forbes points out, check amounts over $1,000 have a maximum $8 fee. If your stimulus check is under $1,000, you will pay a $4 fee. Walmart also offers a Walmart MoneyCard at its Money Services country. The card does come with a $5.94 monthly fee after June 30, but adding at least $1,000 in new funds per month waives the fee. Other supermarkets also cash checks, and Kroger brand stores are cashing stimulus checks for free.