Many large banks and financial providers pay lip service to servicing the LGBTQ+ community, but how many back it up? Acceptance and access are key, says Myles E. Meyers, founder and CEO of the credit union Superbia, in New York.
Meyers cites the “oppressive level of intolerance” found in a study on mortgage applications between 1990 and 2015, calling it shocking. “Same-sex couples were 73% more likely to be turned down for a mortgage than similarly qualified different-sex couples, and same-sex couples who were approved for mortgages paid about 0.02% to 0.2% more, on average, in interest and fees,” Meyers said.
This disparity shows up in actual homeownership, according to John Auten-Schneider, co-owner of Debt-Free Guys and the Queer Money podcast, in Las Vegas. The data shows that while 33% of same-sex couples are homeowners, the national average for opposite-sex couple homeowners is double, at 66%.
- Same-sex couples are much more likely to be turned down for mortgages than similarly qualified different sex couples—and to pay more in interest and fees.
- Some upcoming banks, like Superbia and Daylight—created by LGBTQ+ people for LGBTQ+ people—are designed to help support LGBTQ+ customers and their specific needs.
- Name changes are common and important for transgender people and, according to Experian, changing your entire name, not just your last name, could affect your credit score.
- Mass Mutual and Prudential have researched the financial lives of LGBTQ+ people. Prudential documented that they are under or unbanked compared to non-LGBTQ+ counterparts.
Several issues differentiate the financial lives of LGBTQ+ people, according to Billie Simmons, cofounder of Daylight, a mobile-first banking startup in New York, not the least of which is alienating experiences. As a trans woman, Simmons says updating her legal name and having it reflected on her debit card is laborious and time-consuming. “It outs me multiple times as trans and often is a partial solution," Simmons said. For instance, she has updated her debit card but still needs to log in using her deadname—the name a transgender person was given at birth and no longer uses upon transitioning.
It’s not simply a matter of convenience, points out Simmons, but of safety. If someone is presenting as a woman but uses a debit card with a man’s name on it, the chance for actual violence is real, Simmons said, citing a study in which a third of transgender respondents reported such threats or hostile acts.
Superbia’s inbox is filled with accounts of intolerance and discrimination, Meyers says. “This is the No. 1 aspect. Nearly 60% of the community believe traditional providers ‘don’t want to help people like me,’“ Meyers said, citing a MassMutual study.
If you want more than a rainbow-themed debit card, it’s a good idea to research what is being offered, and what companies are doing to give appropriate customer service—whether you’re shopping for a personal loan, a mortgage, a savings and checking account, or an insurance product.
The following banks and insurance providers show the range of what financial institutions are doing to show they’re more than just money-making enterprises.
A sponsor of the Auten-Schneider's podcast Queer Money, Capital One offers LGBTQ+ focused benefits for employees such as fertility coverage, reimbursements for associates for adoption and surrogacy expenses, domestic partner benefits, and health coverage for gender reassignment.
In 1997, Capital One was one of the first major companies to offer same-sex marriage benefits and is now a vocal supporter of the Equality Act, a proposed bill that "prohibits discrimination based on sex, sexual orientation, and gender identity in areas including public accommodations and facilities, education, federal funding, employment, housing, credit, and the jury system."
Capital One partners with community organizations focused on LGBTQ+ populations, such as SAGE, Attic Youth Center, GLAAD, LGBT Community Center of New Orleans, and Trans Lifeline.
The bank's chatbot has a gender-neutral name (Eno, or One spelled backward), a deliberate choice according to Ken Dodelin, Capital One’s vice president of digital product development, because of recent criticism of the predominance of female names for popular digital assistants.
This LGBTQ+ founded online bank is still in beta stage with a waiting list to sign up for a prepaid Visa card. The mobile-first account has your chosen name, no matter what your ID says. Daylight has no minimum balance and lets you make one free ATM withdrawal each month.
In the works is an online support community where members can give each other advice and support. The platform offers LGBTQ+ financial coaches through an affiliate network; their services can be paid for using your card.
When it comes to changing your name and protecting your credit score, going through legal channels may be your best bet. According to Equifax, the best method is for a transgender or non-binary person to complete a legal name change and then directly inform the credit bureaus. “Doing this provides the critical link needed between their chosen name and their deadname, which will help to maintain the integrity of their credit file during the transition and potentially avoid any misunderstanding with creditors or lenders,” the company says.
The credit bureau provides step-by-step instructions with information on states’ laws for changing your name legally as a transgender person.
Changing your entire name, not just your last name, could affect your credit score, according to Experian. If a consumer is changing their name to match their gender identify, they should contact their lenders to update their name and any additional information, according to a company spokesperson. “The consumer’s new name would then be reported to the credit bureaus and reflected on their credit reports,” the company said.
For transgender individuals, a full name change requires additional steps and documentation. The process not only involves your legal name, but may also include updating vital records such as your Social Security card and driver's license with the federal and state government. The credit bureau's site has detailed information, which was motivated by its employee resource group (the Equifax Pride Network). An outside speaker helped the company understand more about credit reporting challenges that people in the trans and non-binary community face.
In January 2021, JPMorgan Chase said it would donate $5 million to nonprofits that serve LGBTQ+ Americans, many of whom were adversely affected financially during the pandemic. Among those organizations is Services & Advocacy for LGBT Elders (SAGE), one of the oldest nonprofits dedicated to older LGBTQ+ Americans. Internally, the bank has won awards for its own workplace commitment to diversity and inclusion, with local LGBT Employee Resource Group (or ERG) chapters in 15 countries.
Changing your name on a debit or credit card might not be that simple. The bank’s online Account Holder Name Change form is for brokerage accounts, not credit card or savings accounts. If you are a cardholder, you can call the toll-free number on the back of the card. You’ll likely be asked to submit documentation, such as legal proof of a name change.
In a world where many financial institutions are reluctant to use images and stories of LGBTQ+ couples and individuals, MassMutual embraces the community, showing videos on the LGBTQ+ section of its website and on YouTube of same-sex couples going through adoption to promote its advisory services.
The insurer offers financial advisors who are sensitive to the financial needs of the LGBTQ+ community and it supported marriage equality in 2015. The insurer also conducted the MassMutual LGBTQ Financial Security Study in 2017. The study surveyed 500 LGBTQ+ Americans between the ages of 25 and 65 with household incomes between $35,000 and $150,000 (in the survey researchers used LGBTQ, not LGBTQ+). Among their findings: LGBTQ people were more worried about retirement and finances than the general population. These studies are important for the LGBTQ+ community to learn about their financial situation and make informed financial decisions.
The insurance provider is an outspoken supporter of LGBTQ+ rights and has a range of inclusive policies that support LGBTQ+ employees. In 1996, the company added “sexual orientation” to its non-discrimination policy for employees. In 2000, it offered domestic partnership benefits to employees. Gender identity and expression are now explicitly protected under its non-discrimination policy.
Perhaps the company's biggest contribution are its data dives into the financial experiences of different populations. As well as Asian-Americans, Black Americans, and caregivers, the insurer scrutinized the financial lives of the LGBTQ community in 2017 and includes the community as a data cut in other surveys (the survey researchers use LGBTQ, not LGBTQ+).
“As a community, we cannot make informed decisions [without the data],” said Auten-Schneider, co-owner of Debt-Free Guys and the Queer Money podcast.
In its study, Prudential found that LGBTQ respondents lagged behind their non-LGBTQ counterparts in bank products. “We are part of the under or unbanked,” Auten-Schneider said. “No one can figure out how to help the community if the community is struggling.”
Superbia planned to begin offering products in July 2021 but delays due to the pandemic caused regulatory approval to stall. They are currently working to begin operations soon and eventually aim to provide banking, life and health insurance, and money management services designed for and by the LGBTQ+ community. Checking and savings accounts will feature low rates, no fees, and no discrimination. Card products include the Mastercard True Name feature, which allows users to pick the name they’d like on their banking cards.
The bank’s website has an LGBTQ+ section where customers can sign up for a Pride-themed card. The company also states it provides professionals who are trained to specifically understand the complex financial needs of LGBTQ+ couples and individuals.
Wells Fargo offers access to financial advisors with LGBTQ+ expertise and sensitivity. Long before same-sex marriage was legalized, the bank partnered with the College of Financial Planning to create the designation of Accredited Domestic Partner Adviser (ADPA) and offered its financial advisors the chance to take the training. Investment advisors gain an understanding of issues that affect LGBTQ+ couples and domestic partners so they can be advocates for the community. In the event the partnership ends in death or divorce, an advisor with this designation can ensure that the interests of both partners are protected.
The Bottom Line
Progress may seem slow, but financial services companies are making moves toward inclusion. “A lot of LGBTQ people grew up being told they didn’t have a future,” Simmons said, “and now with legislative backing and more visibility in the media, I think collectively we are able for the first time to envision what those futures might look like.”
Members of the LGBTQ+ community are now learning more about forming personal finance habits that will see them through their lifetimes, Simmons says. “We see part of our job as showing LGBTQ people how their spending habits are affecting their ability to reach goals and build a future.”
Finding the right financial provider to work with is a key part of a solid financial life. John Auten-Schneider suggests talking to others in the community to see which banks they use and who they feel is supportive. Choose the providers you know actually give the support, Auten-Schneider says. He also suggests asking advisors and institutions what they do to support the community throughout the year, not just during Pride Month.
“We feel the community is starting to have discussions about personal finance, and now organizations like Capital One, Daylight, and Superbia are really trying to get the community talking about financial security,” Auten-Schneider said. “We are optimistic about the future.”