Apr 20 '20
Credit Union Support for Domestic Violence Survivors During COVID-19 and Beyond
To protect against COVID-19, Americans are told to “stay home, stay safe.” But what if your home is not safe? The pandemic has exacerbated the gender, racial, and economic inequalities facing survivors of domestic violence, deepening their economic insecurity and putting them at increased risk of future abuse.
To protect against COVID-19, Americans are told to “stay home, stay safe.” But what if your home is not safe? What if you are one of the millions of people in this country who share a home with an abusive partner?
Instead of safety, staying home means enduring physical, sexual, and verbal assaults without escape. It means having limited autonomy and freedom to make decisions about daily life, including how to protect one’s family from this coronavirus. And, it means contending with the personal financial implications of a global economic crisis while facing mounting financial deprivation and exploitation at the hands of an intimate partner. The financial implications are even more dire for domestic violence (DV) survivors from marginalized communities. The pandemic has exacerbated the gender, racial, and economic inequalities facing survivors, deepening their economic insecurity and putting them at increased risk of future abuse.
Economic abuse makes many DV survivors especially vulnerable to financial hardship during this period of economic downturn. This type of abuse involves an array of control tactics that restrict and exploit the victims’ economic resources. Of particular concern at present, abusers keep their partners from having the money they need to buy necessities and pay bills. They demand that the couple use joint accounts and then proceed to spend freely while also restricting their partners’ access to these accounts. Abusers use fraud and coercion to take out loans, make purchases on credit, and otherwise run up debt in their partners' names. Often these debts go undiscovered or unpaid due to abuser interference, damaging survivors’ credit ratings, thereby increasing the cost of accessing services and borrowing. Manipulation of joint accounts and running up debts in survivors’ names will be even easier as social distancing requires that most banking be remote, because the depersonalization of consumer finance is what allowed these tactics to work in the first place.
For DV survivors from marginalized communities, the pandemic exacerbates systemic inequalities, which add to the financial harm caused by their abusive partners. Low-wage workers are more likely to lose income as businesses scale back or shut down during the pandemic, and occupations employing low-wage workers are dominated by women and people of color. These groups are more likely to face barriers to traditional lending, necessitating reliance on high-cost “fringe banking” options to meet their emergency financial needs.
Proactive, innovative community intervention is needed to help ease the economic burden of COVID-19 on DV survivors, especially those from marginalized groups. Credit unions can be a vital part of these efforts, by providing immediate help and longer-term initiatives. Here are some types of emergency assistance credit unions can provide:
- Access to stimulus checks. Low-cost check cashing for members is essential. In fact, it’s so essential that credit unions should consider cashing checks for non-members if they can.
- Protection of deposited stimulus checks. Once stimulus funds are deposited, abusive partners may try to withdraw them without survivors’ permission. Credit unions should be alert to this tactic.
- Debt relief during the pandemic. Offer accommodations for survivors who cannot pay debts due to pandemic-related hardship, as allowed under the CARES Act.
- Short-term protection of credit ratings. When granting accommodations, continue to report the account as current or whatever the status was before accommodation. The CARES Act also allows credit unions to take this step.
- Prevention of intimate-partner identity theft. During the pandemic, most banking will be remote banking. This increases opportunities for identity theft by abusive partners. Be on the alert for this type of fraud. Review your remote banking access criteria—what safeguards do you have to lower this risk?
- Access to low-interest loans. DV survivors need alternatives to high-interest credit people use out of desperation, such as subprime credit cards or payday loans. Review first steps your credit union can take to respond.
To transition from emergency assistance to policies that meet DV survivors’ long-term needs, credit unions can implement the following practices, including some in collaboration with organizations that serve DV survivors.
- Raise DV awareness among member-facing staff. Ensure staff with direct member contact are aware of signs that members may be experiencing DV. Provide training on how they can support members and connect them to appropriate resources.
Here are primers on the warning signs of domestic violence, economic abuse, and an infographic on the link between safety and economic security. For more in-depth resources on the credit and debt-related barriers survivors face, consult the Center for Survivor Agency & Justice’s guidebook and toolkits. If you want help connecting and building partnerships with your local domestic violence program, training, or to discuss actions you can take, contact CSAJ at [email protected].
- Access to membership. Provide outreach to DV survivors who qualify for membership but do not join credit unions because of barriers such as lack of awareness, transportation or Internet access. Consider creative ways for DV survivors who are not otherwise eligible to become credit-union members.
- Long-term prevention of DV-related financial malfeasance. Put protocols in place to prevent abusers from using your financial institution to perpetrate economic abuse, such as hijacking joint accounts, generating coerced loans, and incurring fraudulent credit card charges.
- Debt relief after the pandemic. Offer paths to forgiveness of DV-related debts for which survivors received little or no benefit.
- Access to credit reports. Partner with organizations that serve DV survivors to ensure access to their credit reports and scores.
- Credit repair. Offer financial products and services to help DV survivors rebuild their credit. Partnership with service agencies in your communities will be crucial here.
By taking steps like these, credit unions can help reduce the economic harm DV survivors face during and in the aftermath of this pandemic.
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Filene is here to help credit unions support their people and build their business resiliency during the COVID-19 crisis. Filene will be releasing resources in line with what credit unions need most.
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