Credit Unions Need to Make Serving the Unbanked a Priority
I am thrilled to finally be with a credit union in Minneapolis, but my experience joining one illustrates the need for credit unions to rethink their approach and be ready to serve all people.
I've stopped waiting for Village Financial Credit Union to open in North Minneapolis. (As i went to link to villagefinancial.org i see that Google hosting took their site down). My pledge of membership is still good if the community pulls off a miracle and resurrects this essential project.
When Village looked like it was going to come to fruition, it was set to be the first credit union chartered in the United States in a decade. That is the first sign of a systemic crisis; there should be many new member-controlled organizations being formed to meet the banking, investing, and lending needs of diverse communities. North Minneapolis, and much of the United States, very much needs a Black-directed co-operative financial institution, as Village set out to be, for some of the reasons i experienced joining one of the credit unions we do have.
There was no problem with any particular person; the problems are on a level of policy and possibly procedures and implementation, which are undoubtedly common across credit unions.
Affinity Plus Federal Credit Union was the credit union that came up most often in recommendations from friends and in searches for nearby branches or ATMs— especially for credit unions that didn't appear to require me to get a job with city government or move across town to be eligible! Not that it means it was close. There's almost no credit union presence on the Northside, and not many banks either— we mostly have check-cashing and payday loan places here.
I applied online for Affinity. This was frustrating for technical reasons— their integration with Plaid was broken and that stymied the required step of paying for membership in an organization to ensure eligibility and making an initial deposit. Given my further experiences, i find it bad form to be asked for payment before being approved. But that's minor. The real problem was when the Paid integration was removed and i was able to apply a few days later.
Got through everything, and then later got this e-mail:
We’re sorry, but we can’t open your account and/or add your name as an owner/signer on an account. At least we can’t do it via the online account application process.
The Reason Why
We couldn’t verify sufficient details about your credit history.
This is all because i refused to get one of the hundreds of scammy credit card offers shoved at me when i was in college, and proceeded to live my entire life without borrowing or lending money outside of friends and family.
But it's also a damned stupid reason to be turned down for a savings account or a checking account, which involve me putting my own money in.
I have gotten multiple bank accounts without having a credit inquiry run on me. For Affinity, it was the only way to identify me when applying online— which is bad enough, but even in person with photo ID, my credit was checked again for no good reason (and found non-existent again, but in-person i was able to open the account).
Credit unions are in the habit of running a hard pull on your credit when you apply for membership. This practice has to stop, period.
For all that our Affinity representative who ultimately helped us with car-side service said it was to “get a birds eye, 360 degree view of you, know what you need” and that “credit is important to us”, it serves nothing so much as to exclude people who need the services of a credit union the most.
The other problems were not being clearly informed of the credit check while submitting the application online; not being immediately informed that i could continue with the online application if i made it to the credit union in person the next day; and being mis-informed that i would need my social security card.
But the main problem is reliance on the unaccountable, error-ridden, and hack-prone credit rating agencies.
If this was so much trouble for me, a middle-aged business owner (also cooperatively, of course) with multiple existing accounts at financial institutions and relatively plenty of money (compared to twenty percent having no or negative wealth) to move into a new account, how does this work for someone with less documentation? With no time or trust to try a second or third time for approval? With bad credit because one of the dozen parasitical monopoly corporations added fees equaling thousands of percent in interest to a returned payment on a water bill, with the big evil bank that credit unions should be replacing putting their own pile of fees for bouncing a check or falling below a minimum balance, sending people from scraping by to being cast out as financial lepers?
Whether Village rises again, Affinity comes to the Northside, or other credit unions step up, there is a vast need here and in neighborhoods throughout the United States that requires credit unions to do more than add physical locations. Credit unions need to design policies and practices for inclusion.
Then maybe with representation in democratic financial organizations, people who are currently excluded and marginalized will have a vehicle to help work towards equity, towards economic justice.
We need credit unions to support many creative and crucial correctives to the cruelty and brokenness of our current economy, including community currencies and other ways of connecting people to economic activity. Wealth as it is currently distributed, based on great crimes of the past and present, from slavery to redlining to discriminatory insurance rates to wage theft to the simple coercive exploitation of having to sell labor to capitalists who can hoard wealth without limit while we have to work to survive the next month, needs to be bypassed to the greatest extent possible.
Credit unions can be a huge part of a fair future, of building a solidarity economy, but first they need to become representative of the people with the greatest stake in this future.