Diversity has been a continuing battle for most industries including the financial sector. New study research shows that same-sex borrowers are 73% more likely to be denied when applying for a mortgage loan. This forces the question: is there a need for LGBTQ+ banks? Evie Rusman looks at the first-ever LGBTQ+ credit union and analyses what banks are doing to cater for diversity
The study, published by Iowa State University, also shows that when mortgages are approved for same-sex couples, the interest rates are 0.02-0.2% higher than the average.
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At a time when the support for the LGBTQ+ community has come on leaps and bounds, it is difficult to imagine the idea that banks could still be denying people access due to their sexual orientation. So, what is being done to tackle this?
On September 9, Michigan’s Department of Insurance and Financial Services approved the charter for Superbia Credit Union whose focus is on lesbian, gay, bisexual and transgender customers.
Superbia Credit Union will be the first-ever union to specifically target the LGBTQ community and hopes to officially launch its services in the first half of 2020.
Myles Meyers, founder of Superbia, tells Bloomberg: “I can walk into a bank or credit union and apply for a loan or credit card or savings accounts and frankly, no problem. If I walked in to the same institution with my husband, we can come across different responses and welcome. And this is where it all starts to change for the community.”
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By GlobalDataIt seems only necessary that the financial sector starts targeting the LGBTQ+ community as in 2017 the combined buying power of the U.S. lesbian, gay, bisexual and transgender adult population was estimated at $987bn.
However, even though LGBTQ members in the US are customers of more traditional banks, they still are not explicitly protected from discrimination in federal lending laws.
Additionally, some states still do not have regulation on prohibiting housing and accommodation discrimination against LGBTQ people. This means that sexual orientation or gender may be considered when assessing credit.
What is Superbia offering that is different?
Superbia’s goal is to eliminate financial discrimination and provide better economic options for the LGBTQ+ community.
One of the ways it hopes to help the community is by providing access to fair, non-discriminatory products and services that care for the ‘unique’ needs of the community.
In addition, the credit union hopes to put profit back into the operation of the credit union to further remove fees, provide more favourable rates and fund special member benefits. It will also award up to 30% of profit directly to LGBTQ organisations, initiatives and community needs across the US.
Superbia will now form a board and begin hiring executives. It also hopes to expand into products such as insurance, healthcare and wealth management specifically designed for the community.
Best banks for diversity and inclusion
UK-based Lloyds Bank is one of the top performers when it comes to inclusiveness of the LGBTQ+ community. In 2019, it placed seventh in Stonewall’s Top 100 employers list, which celebrates the efforts of leading organisations to create inclusive workplaces.
A Lloyds Bank spokesperson tells RBI: “Our goal is to become the best bank for customers; one that truly reflects 21st century Britain in the diversity of its workforce and, consequently, understands the needs of an equally diverse customer base.
“Our vision is to be a UK leader in Inclusion and Diversity. As part of our Helping Britain Prosper Plan, we’ve made public commitments on Inclusion and Diversity, as we want Lloyds Banking Group to be a genuinely meritocratic and inclusive place to work, with every colleague treated fairly and with respect.
“We recognise that Inclusion and Diversity in the workplace brings about diversity of thought and leads to better and sounder business decisions and practices.”
The banking group estimates to have over 2,500 LGBTQ+ employees and runs an LGBT programme.
It offers a number of initiatives including the Rainbow Network, which has over 5,000 members and supporters. The Rainbow Network aims to connect, develop and support LGBTQ colleagues across the group.
The spokesperson says: “Our services and products are inclusive to everyone. However, for the LGBT+ community specifically, there is support to prioritise matters that are most important.
“For example, we have changed our systems to ensure we offer additional titles, for example MX, and where possible we have removed the need to ask for gender.
“Furthermore, we can offer additional cards which supports our customers who may be transitioning or identify as gender neutral.”
In addition to this, Lloyds have formed partnerships with a number of LGBTQ+ charities and have given over £250K in colleague matched funding.
“These special relationships have helped shape our policies, processes and changed the hearts and minds of thousands of colleagues who may not have understood what challenges people may still face,” the spokesperson adds.
“We will continue to listen to the trans* community both from our own colleague base and externally to prioritise changes that matter most to them.”
Mark Kember, director of memberships at Stonewall, comments: “LGBT-only banking services can address the problems LGBT people face in the short term, but it’s important to make sure that the wider culture of the finance industry is inclusive of LGBT people, both as customers and employees.
“Through our Diversity Champions programme, we work with banks to help them better support LGBT customers and staff. Things like offering an Mx title on their systems and training customer-facing staff on how best to support LGBT people can make a big difference, as well as ensuring that there is a visible support internally for LGBT staff.”
Another bank that ranks high when it comes to diversity is RBC. In a new index from Refinitiv, RBC ranked third in the world for Diversity and Inclusion.
The Canadian bank has a Diversity & Inclusion Blueprint for 2020 which outlines its priorities and objectives in Canada as well as internationally.
Is enough being done?
Although banks such as Lloyds are offering services specifically targeted to the LGBTQ+ community, in general banks still face criticism for not doing enough.
Moreover, it is not just issues to do with sexual orientation that surround the workplace but gender diversity as well. Even today women still remain underrepresented at senior levels in banks and across the financial sector overall.
For instance, to the end of 2017, men had been appointed for more than nine out of 10 of the most senior and influential roles within banks. These roles include chair persons, chief executives and chief finance officers.
This lack of diversity at a senior level that they may not be doing enough to increase progression, leaving many dissatisfied.
