The Financial Benefits of Citizenship for Hispanic Americans

CA_Latino_Financial_Access_ReportWeb.pdf - Mozilla Firefox 6132013 21951 PMThe National Council of La Raza (NCLR) recently released a new report titled ‘Latino Financial Access and Inclusion‘, which examines the financial benefits of citizenship for Hispanic Americans.  Included within the report are ways in which citizenship provides new opportunities for individuals to build their financial capacity.

Between January and April 2012, NCLR worked with eight NCLR Affiliates and four Progreso Financiero stores to survey more than 1,000 low-income Hispanic individuals across California.  The objective of this survey was to understand how Latino households were interacting with the financial services industry, the qualities and experiences that shaped their attitudes and decision-making, and the ways in which technology was either fostering or inhibiting access to financial services.  Below are a few key factors we pulled from the report:

Account Ownership and Use:

  • The majority of survey participants were saving. However, those without a bank account were less likely to save than participants with an account.
  • Survey respondents were tapping into a wide range of financial tools beyond those associated with accounts, such as checks or debit cards. Moreover, personal networks were an important financial tool.

Age, Citizenship Status, and Employment:

  • Account ownership fluctuated among age groups. Immigrant account ownership varied based on time in the country.
  • Foreign-born citizens had higher engagement levels than similarly situated immigrants who have yet to naturalize.
  • Participants pointed to the lack of bilingual capacity among financial institutions and burdensome identification requirements as major obstacles to building a meaningful relationship with a financial institution.
  • The unemployed were less likely to have an account than the employed.

Conducting Routine Financial Transactions:

  • Cash remains popular, but respondents more often combined many different payment methods.
  • The unemployed are less likely to pay for daily expenses with credit cards than those with regular employment.

Customer Service and Consumer Inclusion:

  • Overwhelmingly, consumers are looking for a bank that offers good customer service and affordable services, more so than other features such as location and hours.
  • The unemployed were particularly sensitive to account costs and needed affordable access to cash.
  • Few surveyed were prepared for an unexpected expense and many reported trouble paying their bills in the previous year. Participants expect to lean heavily on family and friends to borrow funds should the need arise.

Use of Alternative Financial Services and Products:

  • Check cashing and money orders were the nonbank products used most frequently. Respondents pointed to convenience and pricing as top reasons for using AFS.

Technology and Banking:

  • Full adopters of technology tended to be younger and were pleased with the convenience offered by mobile bank access.
  • Technology testers were largely account owners. Concern for the security of personal information was a major deterrent to further technology uptake.
  • Survey participants without a bank account were the least likely to have Internet capabilities. Their discomfort with bank technology appears to stem from a lack of access and information security concerns.

In response to the release of the report,  American Bankers Association (ABA) Senior Vice President, Corey Carlisle, stated that banks see all people as valued customers regardless of immigration status.  He also added that banks are working in partnership with nonprofit organizations to address these customers’ needs and financial conditions by providing them access to the safest and most reliable means of saving and managing money.

To download and read the full report, click here.

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