The latest FDIC survey (2012) on Americans excluded from regular banking services reported that between 8% and 20% of American households have either little or no relationship with a bank, savings institution, credit union, or other mainstream financial service providers. The only option for these customers, many of whom are ethnic minorities and immigrant communities, is to turn to AFS - Alternative Financial Services-the official name of fringe banking. Fringe banks like Ace Cash Express, EZLoans, or Mr. Payroll deliberately target the low- to moderate-income inner-city residents, often because these neighborhoods have become deserted by regular banks, making it difficult for these groups to apply for loans, credit cards, and mortgages. The American banking industry has indeed become polarized between banks in the top tier of the system who cater to the wealthier and less risky customers located in the affluent suburbs, and a market of second and third tier outlets, ranging from pawnshops and payday lenders to check-cashing outlets and cash-and-carry agencies. These outlets practice usurious interest rates and are booming today in the wake of the recent financial meltdown.

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