More than 50 years after the Stonewall riots, LGBTQIA+ Americans still struggle for financial equality. Although Pride is a time to celebrate the accomplishments of this community, it's also a time to see where we as allies are still coming up short in how we can help. A study from the Center for LGBTQ Economic Advancement and Research showed that LGBTQ Americans were twice as likely to have "poor" or "very poor" credit scores as non-LGBTQ respondents. Plus, same-sex couples are
As a three-time fintech founder with experience in providing opportunities to underserved communities, I've learned the importance of financial equity for all.
Financial equity isn't just about having equal capital; it's also about having equal opportunity. From my experience, credit is one industry that still impacts demographics differently, often discriminating in ways that might not seem patronizing at face value but are rooted in inherent societal bias.
The statistics of this community still tell a story. According to the
So, to follow the famous words of Stormé DeLarverie during the Stonewall riots, "Why don't you do something?" We should all ask ourselves the same question.
Now more than ever, here's how the credit industry continues to fall short with the LGBTQIA+ community, and what we can do to help.
Financial education is only beginning to become the norm in our educational system. Without this education and family support, it's an ever-increasing challenge to understand what is needed to get ahead, so we must continue to improve adolescent financial education at a national level.
LGBTQIA+ individuals more prevalently face discrimination in school, which can negatively impact their education. According to the Department of Education, at least 20% of students report being bullied. Add to that feelings of being an outsider and "different," and the numbers scale up even higher.
Bullying and harassment lead students to drop out at even higher rates. Often, individuals from the LGBTQIA+ community also report scarce home life support, increasing the likelihood of homelessness and overall lack of opportunity. All of these factors feed into future issues within the job market, putting them at a financial disadvantage from the start.
A way to supplement the lack of education offered systemically is to implement more routes to receive financial education from our peers and online. As a society, this is where we can start. We must make educational resources free and accessible to anyone to help provide this education. More resources, in addition to a reprioritized emphasis on the importance of financial education across industries and culture as a whole, can work to create a more even playing field.
The unique medical needs of LGBTQIA+ individuals are not often covered by traditional health insurance policies. Things like gender affirming care and IVF are costly. Also, although the number of same-sex spousal benefits from employers
Shifting the healthcare industry as a whole will take decades, but what we can do now is support financial wellness and access to credit for when these services are needed.
For small credit unions, enlisting outside helps accelerate the development of new products — as long as all risks and regulations are properly addressed.
A higher credit score allows for cheaper loan rates, access to new credit lines, as well as better insurance premiums for expenses that are processed through health plans.
In the U.S., access to medical care comes from access to financing. Through financial support — in our case through higher credit scores — we can support others to access the funds they need to fulfill their medical needs.
LGBTQIA+ individuals are
Personal identifying information such as your name and Social Security number are on your application. Name changes will also be reflected on your application. For members of the LGBTQIA+ community, who may have changes or revealing identifiers in their personal information, these applications expose them to discrimination.
Your tax returns, W-2s, proof of income, credit reports, bank statements and renting history are all also needed when applying for a mortgage. All of these documents are meant to tell lenders a story about who you are and your level of responsibility to have a mortgage under your name.
Any discrepancies and changes that are reflected in these documents can send a red flag to lenders. Whether it's human-led discrimination or a software algorithm sifting things out that don't entirely line up, auto-rejections can occur. And unless you take the time to refute any rejections, you'll stay stuck.
As a leader in the financial industry, I believe it's up to us to improve the way we review applications for credit, lending and bank accounts, among others. An AI or algorithm might auto-decline certain individuals, but might not have the bias a person might have. Alternatively, an empathetic human might take the time to delve into an application even further. It's on us to figure out the best solution in order to get quality applicants through.
Currently, 71% of LGBTQIA+ Americans
All of these types of discrimination and causes of inequality are related to credit access and financial needs being met.
The financial industry and personal financial management are quite complex. As a leader in the industry, I understand the many factors involved in succeeding financially in the U.S. Factors such as race, gender and education, transportation and technology access all play major factors in one's overall wellness.
As an LGBTQIA+ ally, I feel personally responsible to do my part to support the community. We must all be continually learning how we can help even more.
