In a report released Monday afternoon, Whitney explains how financial reforms, such as this summer's Dodd-Frank Act, will cause profits at banks to decline. As part of their efforts to increase profits, the financial institutions will close 5% of their bank offices.
"The most regrettable unintended consequence of some of the quickly written regulatory reform, we believe, will be the inevitable 'de-banking' of the U.S. financial system," she writes.
In January 2009, a Federal Deposit Insurance Corp. survey found that 30 million U.S. households were "unbanked" or "underbanked" -- that is, they did not have accounts at banks or other mainstream financial institutions, despite FDIC efforts to encourage banks to expand their low-cost offerings.
Whitney expects the ranks of the "unbanked" will rise to 41 million households in 2015, as institutions reconsider the costs and benefits of all manner of products.