Jun 26 2006

New Study discusses how Latinos deal with finances

Through this enormous data set, Robles discusses, for the benefit of credit unions, how Latinos in the Borderlands deal with finances and accumulate wealth. Robles examines the Borderlands because the demographics of this area are similar to other high-density Latino populations across the United States.

During the 2003 and 2004 tax seasons, Professor Robles, her team of graduate assistants and over 65 community organizations collected information from 7,000 tax returns and conducted in-depth behavioral surveys with over 2,000 families in the Borderlands area of Texas, New Mexico and Arizona. Robles examines the Borderlands because the demographics of this area are similar to other high-density Latino populations across the United States.

Robles confirms certain preconceptions about Latinos in the Borderland area. Specifically, the population is:

  • Largely foreign born
  • Highly unbanked and poor
  • Isolated from the community at large
  • Living in multi-generational family and non-family situations
  • Deficient in formal educational achievement

Additionally, Robles’ data clarifies some of this group’s financial behaviors and needs:

  • Close to half depend on family assistance in financial emergencies
  • One-quarter send money to relatives not currently living with them
  • One-third want more information about buying a home
  • Use of tax refund anticipation (RAL) loans is wide and varied (paying medical bills, house down payment, school expenses, etc.)
  • Over one-quarter are unbanked

In addition to the data available in this study, Robles presents several unique ideas and opportunities for credit unions to effectively serve high-density Latino populations. Perhaps most germane is her suggestion that credit unions proactively cement relationships with community-based organizations which already have a hard-wired connection to the local Latino community. Robles contends that Latino communities trust these organizations due to their cultural responsiveness and long-term commitment to the local community.

In tandem with the study, the Filene Research Institute releases a special report entitled La Oportunidad, which furnishes additional ideas and statistics to underscore the need for credit unions to be proactive in taking advantage of opportunities in the Latino community.

Ultimately, the data and statistics illustrate two simple points: 1) the Latino population is growing in absolute numbers, and 2) the financial needs of this population are becoming more acute, complex and underserved. So in addition to reading these reports and passing them on to your board and staff members we aim to inspire your credit union to enhance and/or begin its outreach efforts to the burgeoning Latino population in the U.S.