The coronavirus pandemic has exacerbated the issues the Hispanic and Latinx communities — who have been historically neglected by the U.S. banking system — face. Access to banks and credit unions is even more vital now, as stimulus checks and unemployment benefits are widely relied on.
But the fact is 16.2% of U.S. Hispanic and Latinx households don’t have a bank account. And of the people who do, almost 30% are underbanked. Which means they have an account, but still depend on other resources like cash checks or payday loans.
“Lack of trust is probably the number one cause why Hispanics and Latinos are highly unbanked and underbanked,” says Maria J. Martinez, President and CEO of Border Federal Credit Union (BFCU).
Latino credit unions fill the gaps in service and give Hispanic and Latinx communities the resources they need — regardless of immigration status, the forms of identification or the language they speak.
Why do we need Latinx credit unions?
The reasons the Hispanic and Latinx communities are underserved by banks vary, though it’s fair to say that mistrust is a big part of the equation. Many traditional U.S. banks have rigid identification requirements or limited bilingual resources that can limit someone’s ability to manage their finances or plan for the future.
[ Read: The Best Banks in October 2020 ]
“Some credit unions may lack the bilingual staff within their organization, but if they are in areas where Hispanics and Latinx live and work, then they should start recruitment efforts in these communities,” says Martinez.
Unlike banks, Latinx credit unions focus on the community around them. These not-for-profit institutions are making significant strides to ensure people have the resources they need and explain how to get them when they don’t.
“Other credit unions need to start being comfortable about serving Hispanics and not view this relationship as an expense but as a long-term strategic investment,” says Martinez.
What resources do they offer?
According to Martinez, “Hispanic consumers want to bank where they feel welcome and where they find bilingual staff who are familiar faces from the community.”
The financial counseling and special products offered by these credit unions help the Latinx populations make smart money decisions and allow them to stop relying on predatory alternatives to bail them out of financial uncertainty.
There are 108 credit unions across the country that belong to Juntos Avanzamos (Together We Advance) — a program that provides affordable banking opportunities directly to the Latinx communities. Juntos Avanzamos has a network across 26 states, including Puerto Rico and DC. Participating credit unions provide access to affordable services and resources by:
- Offering financial education resources
- Accepting alternative proof of credit history, like rent or utility payments
- Accepting alternative identification like an ITIN (Individual Tax Identification number) or Matrícula Consular
- Providing bilingual staff and documentation
- Having Latino board members or members of the executive team
State by state Latinx credit union locations
Here’s a list of Latinx credit unions that are a part of Juntos Avanzamos.
We welcome your feedback on this article. Contact us at firstname.lastname@example.org with comments or questions.
Image Credit: Anrtonio_Diaz/Getty Images