Fed Consumer Finance Survey Reveals Online Banking Usage, (Slightly) Higher Debt Burdens


DISCLAIMER: As the COVID-19 public health situation evolves, new regulations are being continually issued. This page/story/information may not include the most recent information.The Fed’s latest Survey of Consumer Finances might come with a caveat: The data measure a period that may seem long ago and far away — the time before COVID, of course. But they show an increasing interest in online banking, an attempt to grow savings — and a higher debt burden.

At a high level, noted the Federal Reserve, between 2016 and 2019, real gross domestic product grew at an annual 2.5 percent rate, while the overall (civilian) unemployment rate slipped from 5 percent to 3 percent. Median family income was up about 5 percent in the three years through 2019, to about $58,600.

“The improvements in economic activity along with rising house and corporate equity prices combined to support continued increases in median and mean family net worth (wealth) between 2016 and 2019,” the Fed noted. Housing certainly contributed to a wealth boost, up more than 5 percent annually, while equity markets increased by double-digit percentages from 2016 to 2019.

Between 2016 and 2019, the proportion of all families that saved increased from 55 percent to 59 percent. Transaction accounts — which the Federal Reserve reported include checking, savings, money market, call accounts, and prepaid debit cards — remained the most commonly held type of financial asset in 2019. That ownership rate was more than 98 percent, growing from 2016 to 2019 to a median value that was up 11 percent to $5,300.

At least some of the improvements in financial position may also have come through private business ownership. The Fed noted that, overall, about 13 percent of families surveyed owned a business.

“Business ownership increases with income, and nearly 40 percent of families in the top decile of the income distribution owned a business,” reported the Fed.

Owning at least some type of financial asset was commonplace over the measured period. Overall, 98.7 percent of families in 2019 owned at least one financial asset — which includes transaction accounts, certificates of deposit, savings bonds, other bonds, stocks and other holdings.

Online Banking  

The Fed also delved into whether use of online banking during 2016 to 2019 had reduced use of banking services in a physical setting.

“Even families that used online banking continued to use at least some physical financial services, such as visiting local bank branches,” the Fed found.

Even among families that used online banking, 79 percent visited their checking account branch, and 67 percent visited their savings account branch in 2019.

Debt Burden 

The data show that the debt burden increased over this timeframe, after having declined from 2010 to 2016 and as measured as various ratios — leverage, debt to income and payment to income. “Most of these ratios increased slightly between 2016 and 2019, implying families faced somewhat higher debt burdens … However, these ratios remain below their levels just before the 2007–08 financial crisis. In 2019, the median leverage ratio for debtors was slightly below its 2007 level at 33.9 percent; median debt-to-income and payment-to-income ratios for debtors in 2019 — at 95.7 percent and 15.3 percent, respectively — were well below 2007 levels,” the Federal Reserve stated.

As far as debt service was concerned, the Fed reported that in 2019, 12.3 percent of families surveyed reported being late on payments, down from 13.5 percent in 2016 and leagues below the 20.8 percent in 2007.

PYMNTS research has revealed that more than 59 percent of consumers live paycheck to paycheck and almost have less than $2,500 in savings.

“The percentage of families that reported being 60 days late or more declined from 5.8 percent in 2016 to 4.6 percent in 2019, substantially below the recent peak of 8.1 percent in 2010,” according to the Fed.


Michigan license number:   DM-0016282 Available to the public and licensed in Michigan.

Section 13(1)  When a licensee establishes a debt management plan for a debtor, the licensee may charge and receive an initial fee of $50.00

Section 13(2)  A licensee shall attempt to obtain consent to participate in a debt management plan from at least 51%, in number or dollar amount, of the debtor’s creditors within 90 days after establishing the debt management plan. If the required consent is not actually received by the licensee, the licensee shall provide notice to the debtor of the lack of required consent and the debtor may, at its option, close the account. If the debtor decides to close the account, any unexpended funds shall be returned to the debtor or disbursed as directed by the debtor.

Sec. 14. (1) A contract between a licensee and debtor shall include all of the following:

(a) Each creditor to which payments will be made and the amount owed each creditor. A licensee may rely on records of the debtor and other information available to it to determine the amount owed to a creditor.

(b) The total amount of the licensee’s charges.

(c) The beginning and termination dates of the contract.

(d) The principal amount and approximate interest charges of the debtor’s obligations to be paid under the debt management plan.

(e) The name and address of the licensee and of the debtor.

(f) Any other provisions or disclosures that the director determines are necessary for the protection of the debtor and the proper conduct of business by a licensee.

Sec. 18. (1) In addition to the fee described in section 13(1), a licensee may charge a reasonable fee for providing debt management services under a debt management plan. The fee under this subsection shall not exceed 15% of the amount of the debt to be liquidated during the express term of the plan.

(2) A licensee may offer a debtor the option to purchase credit reports or educational materials and products, and charge a fee to the debtor if the debtor elects to purchase any of those items from the licensee.  Fees charged under this subsection are not subject to the 15% limitation on fees described in subsection (1).

(3) Except for a cancellation described in subsection (4), in the event of cancellation of or default in the performance of the contract by the debtor before its successful completion, a licensee may collect $25.00 in addition to any fees and charges of the licensee previously received by the licensee. This $25.00 fee is not subject to the 15% limitation on fees and charges under subsection (1).

(4) A contract is in effect when it is signed by the licensee and the debtor and the debtor has made a payment of any amount to the licensee. The debtor has the right to cancel the contract until 12 midnight of the third business day after the first day the contract is in effect by delivering written notice of cancellation to the licensee. A cancellation described in this section is not subject to, and a licensee shall not collect, the fee described in subsection (3).

(5) If a debtor fails to make a payment of any amount to a licensee within 60 days after the date a payment is due under a contract, the licensee may, in its discretion, cancel the debt management contract if it determines that the plan is no longer suitable for the debtor, the debtor fails to affirmatively communicate to the licensee the debtor’s desire to continue the plan, or the creditors of the debtor refuse to continue accepting payments under the plan.

(6) A licensee shall not contract for, receive, or charge a debtor an amount greater than authorized by this act. A person that violates this subsection, except as the result of an inadvertent clerical or computer error, shall return to the debtor the amount of the payments received from or on behalf of the debtor and not distributed to creditors, and, as a penalty, an amount equal to the amount overcharged.

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