According to a report released by the Policy Economic Research Council, more than 55 percent of African-American households are either unbanked or underbanked.

Unbanked means that these U.S. households do not have a checking or savings account and must rely on check cashers or prepaid cards. Underbanked households have a bank account, but are still forced to use high-interest, sub-prime financial services to make ends meet.

During a Q&A with Yale News, Economic Sociologist Frederick F. Wherry expanded on what is known as “credit invisibles,” and how these concepts effect the economic state of blacks in the long run.

From Yale News:

Who are the “credit invisibles”?

Credit invisibles are people who engage in credit-worthy activities — such as paying utility and phone bills — but do not have enough of this information reported to credit agencies to be considered “scoreable.” For this reason they tend to have incomplete or non-existent credit histories, as information from utility companies is generally not shared. They are invisible because we are not looking for them, not because they are unworthy of credit.

How many people are in this category?

In an overlapping (but not identical) population, 8.2% of U.S. households are “unbanked” — they don’t have a checking or savings account. Another 20.2% are “under-banked” — they may have a bank account, but use alternative financial services such as payday loans, pawnshops, or refund anticipation loans. This affects more than 30 million households; 55% of black households are un- or under-banked, as are 49% of Hispanic households.

Read more at Yale News

According to Wherry, approximately 35-54 million Americans fall into this population. He views this as a significant social justice issue, but one this is not paid attention to by economists, politicians and the media.

“If a large percentage of your income is going to transaction costs, that’s money you’re not putting into consumption. If every time you’re making a transaction you’re losing 15%, 20%, 30% on it, you’re not saving or spending it in some other way. This is the sleeper social justice issue of our time. How many sub-prime households do we need to have before people are ready to talk about this?” Wherry said.

Thoughts on the report’s findings?

How can we ensure that African American households are well educated when it comes to finances?

Sound off below!