Having access to a bank account is not something that women in the U.S. have to worry about today. Society has changed so that banking services have practically become woven into the fabric of day-to-day life. On top of that, many employers will only pay their employees’ salaries by direct deposit into their bank accounts.
The vast majority of today’s women in the U.S. are employed and need access to their finances in the same way as their male counterparts. It is hard to imagine that not so long ago, women were not allowed to have their bank accounts or control over their earnings or assets.
What Year Could Women Open A Bank Account?
Documented history clearly shows how women have been fighting for financial independence and lobbying for equal pay, asset, and property rights since the 1700s. The journey has been long and arduous. However, thankfully, society has come a long way since then!
So you can fully grasp the impact of women not being able to have their own bank accounts before the 1960s, let’s take a look at the history of women’s rights from a financial perspective.
Before the U.S. became a sovereign nation in 1776, the American colonies adopted British law. The law viewed married men and women as one financial entity with all matters controlled by the husband; this was referred to as coverture.
Married women had no choice but to depend on their husbands financially. Often, coverture was misinterpreted to mean that women became the property of their husbands upon marriage, but it was merely a distortion of the law.
In legal terms, coverture was the inclusion of a woman into the legal person of her husband for marital estates to be merged and managed as a single unit. Married women could not own property in their name or enter into work of any kind without their husband’s consent.
They also could not file lawsuits or appear in court. Property, inheritance, or earnings belonging to a married woman became her husband’s property upon marriage. Women weren’t allowed to make any decisions for themselves. However, they could still be held legally responsible for any debts incurred by their husbands.
Men didn’t require their wives’ signatures or consent to purchase or sell off any assets, even in cases where the assets belonged to their wives before marriage or were their inheritance.
The law in Pennsylvania changed in 1718 to allow married women to manage financial and property matters legally. However, this applied only if their husbands were incapacitated.
New York became the first state to require a married women’s signature to consent to the sale of property belonging to the woman before she got married. The husband still conducted all negotiations and arrangements.
However, the judge overseeing the property sale was required to meet the woman without her husband present to ensure that her agreement to the sale wasn’t coerced.
The Women’s Rights Movement, which started in the early 1800s, paved the way for some significant milestones in a relatively unchanged financial system. Mississippi became the first state to allow married women to own and manage their own property in 1839.
States began to follow suit after the enactment of this legislation in Mississippi.
The New World demanded that women take on more responsibility, seeing as their husbands would often be away for long periods, rendering them incapable of managing home affairs.
Maine became the first American state to allow married women to opt into a “separate economy” in 1844. The law allowed married women to earn their own income if they chose to, independently from their husbands.
Women could retain their earnings separately, and husbands were not permitted to demand access to the funds. However, traditional banking was not yet commonplace like today, and women could not hold bank accounts in their names.
New York passed the pivotal Married Woman’s Property Act. Following this act, women were no longer held liable for their husbands’ debts, were able to file lawsuits, and enter contracts in their own names without their husbands’ permission.
They were also able to receive and maintain inheritance, own real estate, and collect rents on their property. Married women became individuals again financially, as though they were unmarried. The act was eventually used as a model for other U.S. states to enact their own versions of the law up until the 1900s.
California passed an act in 1862 that led to establishing the state savings and loan industry. The act was the first step towards allowing women to access banking services as the law allowed women to control funds deposited in their names.
In fact, the San Francisco Savings Union approved the first loan to a woman! Abraham Lincoln signed the U.S. Homestead Act in the same year, making it easier for widowed, divorced, and single women to claim land without requiring a man to cosign.
Women across the states were still decades away from earning the right to vote, and few owned or managed property (even though they were legally allowed to). However, on Wall Street, the financially savvy Victoria Woodhull and her sister Tennessee Claflin were tired of being shut out of the New York Stock Exchange.
As they weren’t allowed to invest based on their gender, women created their stock brokerage on Wall Street. Woodhull and Claflin deliberately cut out the male middlemen earning hefty commissions to speculate on women’s behalf.
The first bank to cater to women customers only opened in Clarksville, Tennessee.
Tennessee’s First Women’s Bank had all female employees and directors, but all shareholders were men. Most other financial institutions continued to refuse to allow women to open bank accounts at the time.
The Fair Labor Standards Act was enacted in 1938. The federal minimum wage was laid out through this law to cut the wage gap between men and women for hourly-paid labor.
1960 – 1972
The Equal Pay Act was enacted in 1963 to improve the Fair Labor Standards Act of 1938. The legislation came into place to protect people against gender discrimination in the workplace. All forms of compensation are included in the law instead of solely the minimum wages of individuals.
Employers could no longer use the loophole of fringe benefits to pay women less than their male counterparts. The law expanded in 1972 to include varying job titles.
In 1968 it became illegal to place gender-specific job vacancy advertisements across the United States. Throughout the 1960s, it became more commonplace for both single and married women to open bank accounts. However, many financial institutions still refused to open lines of credit or offer loans to women.
1974 – 1975
The Equal Credit Opportunity Act was passed in 1974. Before this law came into place, women needed a man to cosign credit applications for them. That’s because financial institutions deemed them to be financially risky.
The passing of this law prohibited credit card companies, banks, and credit unions from discriminating against loan or credit card applicants based on race, gender, or religion.
First Women’s Bank opened its doors in New York in 1975. It was the very first completely female-owned commercial bank in the United States!
1978 – 1981
Women across America welcomed the passing of the Pregnancy Discrimination Act in 1978. Before the law came into effect, employers were within their legal rights to dismiss employees for becoming pregnant or having complications during pregnancy that hindered them from working.
The Federal Equal Employment Opportunity Commission, established through the Civil Rights Act of 1964, first defined Sexual Harassment in 1980.
The last remnants of coverture were finally stripped legally in 1981. The United States Supreme Court ruled against a husband who took out a second mortgage on a property co-owned by his wife without her knowledge or consent.
The case of Kirchberg v Feenstra finally abolished the practice of men keeping their wives in the dark about financial matters over joint assets. The Supreme Court’s ruling caused an uproar and set the standard that is still maintained today.
Today, banks offer both men and women different bank account options. Credit cards, debit cards, and checks are available to facilitate easy payments and purchases, while opening a bank account online gives you complete control over your personal finances at the touch of a button.
American women today have undoubtedly reached a monumental point of financial freedom. Both men and women decide which financial institution or bank account to choose based on interest rates or perks offered instead of which bank will allow them to use their services
A survey conducted by Women & Co shows that, on average, 66% of women in the U.S. control household budgets and expenditures. The responsibility of managing household finances has most definitely shifted compared to the 1700s!
Younger generations and technological advances pave the way for a bright financial future for women. Opportunities to learn are readily available at the click of a button, and gender stereotypes are slowly beginning to fade, leading us into an era where opportunities are closer to equal for both genders.
Young women appear to be taking advantage of this shift and making an effort to build an expansive knowledge base on how the financial world works.
Despite men being on the verge of being outnumbered by women in the workforce for the first time, women remain largely underrepresented in leadership positions. A mere 5% of CEOs at Fortune 500 companies are women. Undoubtedly, many inequalities still need to be addressed – but we are moving in the right direction.
Frequently Asked Questions
When could women open a bank account?
Women in different states across the U.S. could open bank accounts at different points in time.
However, the major societal shift happened in the 1960s (which doesn’t even seem that long ago!). Financial institutions were given no choice but to allow married and unmarried women access to bank accounts.
When could women apply for a mortgage?
Women won the right to open a bank account in the 1960s. Nevertheless, most banks and credit unions did not offer women credit cards, business loans, or mortgages unless they had a male co-signer.
The Equal Credit Opportunity Act of 1974 allowed women to finally fully manage their personal finances and apply for financing without being represented by a man.
Are there restrictions on women opening bank accounts today?
No, women have the same access to financial services such as bank accounts as men. Banks are no longer allowed to discriminate between genders when providing their services as this would be in breach of civil rights.