New Survey Shows Latinos Are Struggling with High Debt Burdens, Low Savings Rates, and a Lack of Access to Affordable Bank Products
WASHINGTON, DC— UnidosUS, the nation’s largest Latino civil rights and advocacy organization, and Oportun, a Community Development Financial Institution and provider of affordable and responsible financial services, today released the findings of a survey they commissioned on the economic health of Latinos in Arizona, California and Texas.
The survey of 1,200 Latinos was conducted by BSP Research and found that most Latinos are customers of mainstream banks and use credit like other Americans. Yet too many are living on the financial edge and are forced to borrow money in ways that saddle them with debt and limit their potential to save. Low savings prevent financial stability and the ability of Latinos to prepare for homeownership or other wealth-building opportunities that could unleash their economic potential.
“Millions of hardworking Latinos, including the 70% who are considered essential workers, helped sustain the economy during the pandemic, yet their own economic health is suffering from lack of access to reliable and affordable credit,” said Janet Murguía, President and CEO of UnidosUS. “We urge the Biden Administration, regulators, and the banking industry to work together to ensure Latinos have equal opportunity to affordable credit that will bolster both the financial future of the community and the US economy.”
The survey results suggest that reforms and innovations in the banking system can help integrate Latinos into the financial mainstream and ease financial burdens. Among other discoveries, the survey found that:
- About 15% of respondents do not have a deposit account, which is much higher than the overall unbanked rate of 5.4%.
- High costs were two of the top three reasons cited by unbanked respondents for not having an account with 42% of those with an account charged an overdraft fee almost four times more than the national rate of 11%.
- Respondents of the survey trust traditional banks the most of all banks, with 74% sharing they trust traditional banks.
- Latinos also struggle to access credit with 20% of respondents sharing that they have no credit whatsoever. A mere 56% of respondents have a credit card compared to the national rate of 84%.
- Only 62% of respondents trust credit unions with 51% of respondents who earn less than $29,000 a year trusting credit unions compared to 67% of those who make more than $50,000 a year.
- For those that had indicated they were ready to buy a home but had not done so, 57% indicated home prices were too expensive, 50% reported they did not have enough savings, 39% said interest rates were too high, and 34% reported their credit scores were too low.
- Nearly two-thirds of respondents said they don’t have $500 to cover an emergency expense, and 36% indicated that they have had to borrow money from a friend, family member, or another person to cover an emergency.
- More than half of respondents say their debt is affecting their ability to save money.
- More than a third of respondents do not feel confident that they can pay off their debts in the next ten years.
This survey is the latest effort by UnidosUS to understand the financial health of the 62 million Latinos living in the US. UnidosUS will continue to produce new research and analysis, like a recent national poll of Latino voters, to inform policymakers and the public.
The complete findings and methodology of the study, which focused on banking, credit, savings, and debt, can be found here.
UnidosUS, previously known as NCLR (National Council of La Raza), is the nation’s largest Hispanic civil rights and advocacy organization. Through its unique combination of expert research, advocacy, programs, and an Affiliate Network of nearly 300 community-based organizations across the United States and Puerto Rico, UnidosUS simultaneously challenges the social, economic, and political barriers that affect Latinos at the national and local levels. For more than 50 years, UnidosUS has united communities and different groups seeking common ground through collaboration, and that share a desire to make our country stronger. For more information on UnidosUS, visit unidosus.org or follow us on Facebook, Instagram, and Twitter.
Oportun (Nasdaq: OPRT) is an A.I.-powered digital banking platform that seeks to make financial health effortless for anyone. Driven by a mission to provide inclusive and affordable financial services, Oportun helps its over 1.8 million hardworking members meet their daily borrowing, savings, banking, and investing needs. Since inception, Oportun has provided more than $14 billion in responsible and affordable credit, saved its members more than $2.3 billion in interest and fees, and automatically helped members set aside more than $8.1 billion for rainy days and other needs. In recognition of its responsibly designed products, Oportun has been certified as a Community Development Financial Institution (CDFI) since 2009. For more information about Oportun, visit https://oportun.com.