RWP 25-14, October 2025
Approximately 5.6 million U.S. households remained unbanked in 2023. We examine the effects of state-mandated high school personal finance coursework on banking outcomes. Because the unbanked population resorts to alternative financial services, such as payday loans, for their financial needs, we also examine the interplay between payday loan regulation and financial education. We find that exposure to personal finance coursework is associated with a lower likelihood of being unbanked and of unbanked adults being uninterested in opening a bank account. This finding holds regardless of whether the state has allowed or restricted payday lending, but we find larger effects in states with stronger restrictions. These results suggest that, for financial inclusion, regulatory measures and financial education are more likely complements than substitutes.
JEL Classifications: D12, D14, G21, G28
Article Citation
Routh, Aditi, and Carly Urban. 2025. “The Complementary Effects of Financial Inclusion and Payday Lending Regulations on Financial Inclusion.” Federal Reserve Bank of Kansas City, Research Working Paper no. 25-14, October. Available at External Linkhttps://doi.org/10.18651/RWP2025-14
The views expressed are those of the authors and do not necessarily reflect the positions of the Federal Reserve Bank of Kansas City or the Federal Reserve System.