Two LGBTQ CUs in preparation
Two organizations, one in New York City and the other in California, have sought to be the nation’s premier credit unions for more than 20 years serving gay people and their families. Officials believe these people are an underserved minority group that still struggles with barriers, myths and other discriminatory financial issues despite greater public acceptance of their way of life.
Earlier this year, Superbia USA LLC, a New York-based organization led by founder Myles Meyers, raised more than $ 100,000 in pledges that will be used to establish Superbia Credit Union. The organization, which has submitted its Michigan state charter application, has the backing and backing of CU * Answers, PSCU, Mastercard, and other companies and individuals who provide advice and resources for capital, compliance and operational requirements to secure a charter.
Meyers, an insurance and finance professional who most recently served as head of strategy and business in global business planning for Foresters Financial, said his research and recommendations from his business partners had him led to apply for a state charter in Michigan.
“Michigan has been very cooperative with us,” noted Meyers, who works full-time on the de novo credit union project. “We are very encouraged by our communications and the frequency and openness of our communications with them. “
In San Francisco, organizational director and founder of the LGBTQ Credit Union Coalition, Spencer Watson, plans to apply for a federal charter to the NCUA in 2019 with the goal of opening the LGBTQ Federal Credit Union by 2023. The coalition operates under the financial sponsorship of the San Francisco Bay Area. Area Leather Alliance, a non-profit organization that provides education on health and safety issues primarily to the leather, fetish, kink and motorcycle communities. Other Coalition member nonprofits include Sisters of Perpetual Indulgence, St. James Infirmary, and community organizations such as Queer Land Trust, which provides affordable housing for gay people. Watson said these and other groups will be included in the credit union’s scope of membership.
“While organizing the credit union itself is certainly the main goal of the coalition, there are other milestones that we seek to accomplish along the way that develop a solid understanding of financial issues and LGBTQ economics, “said Watson, who previously built National Movements as a campaign and relationship manager for several Bay Area nonprofits and developed the financial and credit knowledge of individual clients as a credit counseling.
“We are also expanding this research and knowledge to address the current information gap on LGBTQ households, and creating workshops and educational programs aimed at helping LGBTQ consumers and businesses identify their specific needs that may differ from those of LGBTQ households. other traditional consumers, and how they can plan more effectively for those needs, ”he said.
Superbia, which is the Latin word for pride, according to Meyers, is a reference to the Gay Pride movement that began in 1969 at the Stonewall Inn in New York City. After the bar was raided by the police, protests erupted, launching the national movement for lesbian, gay, bisexual, transgender and homosexual rights.
Of course, a moment of gay pride will also be celebrated if Superbia and / or the Coalition get their charters and open their doors as new credit unions. For the past two years, Equality Washington organizers in Shoreline, Wash., Had worked with credit union professionals to secure a “white label” charter deal to serve LGBTQ consumers, but the status of this project is unknown. Past and current organizers did not return CU Times messages seeking comment.
The First Gay & Lesbian Credit Union of Dallas is considered the first co-op to serve the gay community in Dallas, Texas, and received its state charter in 1988, according to the NCUA list. But the credit union was not insured until 1991. Six years later, it merged with the Dallas Area Rapid Transit Federal Credit Union, which was amalgamated with the City Credit Union of Dallas in 2007. The First Gay and Lesbian CU served 840 members and assets under management of $ 525,000, 54 loans valued at over $ 337,000 and total shares and deposits of $ 442,996, according to its NCUA appeal final report.
Superbia and the Coalition have much broader visions – to become national. Meyers pointed out that about 10 to 15 million Americans who identify as lesbian, gay, bisexual, transgender or queer hold a combined economic power of about $ 1,000 billion.
“By operating as Superbia Credit Union, we can effectively eliminate this risk of discrimination overnight as we expand across the country,” said Meyers. “So our solution is to be authentic in this proposition at the [LGBTQ] community, being commercially competitive with other credit unions that exist and creating a sustainable mechanism for giving back to the community. This is really what Superbia is all about.
He noted that only 14 states currently have laws that specifically protect against credit discrimination based on sexual orientation and gender identity.
While Superbia will offer all traditional financial products and services, it will offer a unique service experience.
“We also plan to provide the types of loans to trans people and same-sex couples looking to marry or adopt, but the service experience you have with this type of product is where the differentiation occurs.” , Meyers explained. “I’m not interested if you’re male or female. I am interested in your pronoun. This is especially important for trans people when they are completing a [loan] app or when talking to someone. Superbia will bring a level of safety and security to [LGBTQ] community that she just never had the chance to know.
In addition to anecdotal evidence, numerous studies and surveys by companies and universities confirm the existence of discrimination, including pay inequality. And just like the general population, the LGBTQ population faces a variety of financial challenges.
While Watson of the Coalition concedes that there are organizations that do not discriminate against anyone and that there is much broader social acceptance of LGBTQ people, that does not mean that discrimination and inequality are gone.
“As in any underserved or minority community, there are underwriters who are discriminatory, and they have a great deal of latitude and discretion in their ability to set interest rates and approve or deny loans,” Watson said. . “Often they don’t offer any explanation as to how they arrived at a certain interest rate or a certain credit decision.”
For example, using national data from the Home Mortgage Disclosure Act from 1990 to 2015, two professors, Lei Gao and Hua Sun, from the College of Business at Iowa State University, found that unlike loan seekers by elsewhere comparable, the average approval rate for potentially gay applicants was about 3% to 8% lower and their funding costs were about 0.02 to 0.2% higher. That equated to an annual total of $ 8.6 million to $ 86 million in additional interest and fees paid by same-sex borrowers nationwide, according to the study.
The study also found no evidence of higher risk of the defect in gay consumers.
Additionally, according to a 2018 research report from Prudential Insurance, lesbians earned $ 5,000 less than straight women, while gay men earned $ 30,000 less than straight men. The same report also found that 41% of LGBTQ people report having difficulty or being unable to keep track of their finances, compared to 27% of the general consumer population.
Other research by Experian, Aegon-Transamerica, and the Human Rights Campaign found that LGBTQ people struggle to maintain adequate savings and retirement savings, while more than half of LGBTQ employees say there are discrimination based on sexual orientation in their business.
These statistics may come as a surprise to many because there is a common myth that most homosexuals are rich – a myth that has been largely perpetuated by traders in big banks, tobacco and alcohol companies, Watson said.
“There is a very broad assumption that LGBT households have more discretionary spending because they earn the same, or more, than heterosexual households, or because they have no family to support,” he said. he declared. About 30% of same-sex households have children.
These myths about discretionary spending, however, have led to aggressive marketing tactics by tobacco and alcohol companies.
“The same thing certainly happens with debt,” Watson said. “When you have companies like Wells Fargo, Citigroup and US Bank showing up at pride parades with huge rainbow floats and huge rainbow credit card ads , these marketing efforts often rely on their financial support, either through sponsorship or what they claim to be friendly employment practices in their companies.
However, he argues that this type of marketing is not competitive with the real conditions of the products offered by the big banks.
“It does not clearly demonstrate that their products have a higher interest rate or higher financing costs compared to other financial products in the market,” Watson said. “This type of marketing exploits our desire for equality, which is actually a predatory marketing tactic that causes consumers to make purchasing decisions based on business practices that have nothing to do with the competitiveness of the product that consumers have. consumers actually buy. “
Spencer said LGBTQ FCU’s mission will be to provide fair and equal access to affordable financial products and services with lower rates and fees, LGBTQ-specific financial planning, and specialized loans such as loans or grants. for adoption and fertility, and loans or grants.