Queer Persons of Color (QPOC) suffer the greatest burdens of discrimination which drives up the financial services; they are more frequently victimized by alternative financial services (e.g. check cashers, payday lenders, prepaid card issueers) who charge exorbitant fees for services which often leave borrowers poorer than they started.
At the Intersection of Race and LGBTQ-Identity
Race is an even stronger predictor of poverty, lack of credit access, and financial distress than LGBTQ-identification. Communities of color have long struggled against segregation, discrimination, and exploitation in all types of services, and financial services particularly. Indeed, the long history of overt racism in lending and credit access in the middle of the 20th century led to the passage of the Equal Credit Opportunity Act in 1974, and other regulations, made discrimination on the basis of race in credit illegal. However, it is nevertheless the case that individuals of color were historically discriminated against, leaving them with fewer assets today, and sadly violations of the ECOA continue to be reported. But also, invidious discrimination has left communities of color with fewer assets to support their growth, and more vulnerable to predatory products which prey on the economically vulnerable.
Queer Persons of Color (QPOC) suffer intersecting and compounding burdens of discrimination. QPOC households report, generally lower weekly earnings than white LGBTQ households and also, higher unemployment rates and instances of discrimination. But also, this does not merely reflect parity with other individuals of the same race: Black LGBTQ same-sex couples have poverty rates more than 2x the rate of heterosexual black couples.
One-in-three (34%) black trans* individuals reported incomes of less than $10K per year; as did 28% of Latinx respondents, 23% of both Native American and multiracial respondents, and 18% of Asian/Pacific Islander respondents.
The high rates of poverty and financial vulnerability among QPOC suggests they are particularly at risk for victimization by predatory financial services. The high costs for check-cashing, payday loan, and prepaid card services can sap already meager funds and leave users worse of than before. Engaging under-banked and under-served consumers is a top priority of many banks and financial institutions, but many of these communities are (rightly) skeptical of the benefits which banks might offer to them.
A credit union providing trustworthy and sensitive services to the needs of QPOC customers, recognizing their particular financial needs as members of both the LGBTQ and POC communities, and offering low-interest mortgage and credit products suitable to building and retaining wealth may be attractive to these under-served customers, and help them achieve greater financial successes.