Going all in to fight the racial wealth gap
America’s demographics are shifting, and credit unions have a decision to make: Invest in ways to support culturally diverse communities or risk being left behind. For Iowa’s GreenState Credit Union, there’s only one right answer.
Financial inequity: a racial issue
America has an inequality problem. Just like the food we eat, the institutions we bank with are crucial to our health and well-being.
More than 6,500 communities, both urban and rural, live in food deserts with no access to affordable, healthy food. We might think that it’s easy to find a McDonald’s in every American town or city, but in the US, there are actually more payday lenders than McDonald’s restaurants. Just as low-income communities may experience limited access to grocery stores, they can also find themselves without a trusted financial institution in their zip code.
“Just as we have food deserts, we have financial deserts,” GreenState Credit Union’s Kenia Calderon Ceron, VP, Bilingual Business Development Director, said. “What you see in low-income and generally underbanked communities are pawn shops and payday lenders on every single corner.”
Financial deserts disproportionately affect immigrants and people of color. A report from the Iowa Policy Project found that 24 percent of black Iowans are entirely unbanked compared to Iowa’s statewide rate of 4.5 percent. Iowa has the sixth-largest housing gap between Black and White Americans in the US — in Polk County, 73.7 percent of white residents own their home, compared to 49.7 percent of Latino residents and just 2.6 percent of black residents.
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