Everything You Need To Know About Latino Credit Unions & Where to Find One

Owning a bank account means gaining access to credit to help you acquire a home, a car, or get a student or personal loan. Banks tend to favor existing customers, particularly those who manage their money well. The only problem is that some people have difficulty getting the documentation needed to open a bank account.

Immigrants have difficulty getting access to credit unions and subsequently can't get loans with good rates or sometimes even satisfactory customer service to point them in the right direction. This is why Latino credit unions offer vital services to this minority group in our society.

What Are Latino Credit Unions?

Latino-friendly credit unions are non-profit corporations targeting the Hispanic community. Members can borrow from pooled resources at low-interest rates. A Hispanic credit union can also provide traditional banking services to its clients. Some of these credit unions have grown over the years, accommodating thousands of Hispanic members.

Large corporations, organizations, and other entities can form a credit union for Latino employees. Credit unions are created, managed and run by their members. Because of this makeup, these are non-profit enterprises that enjoy tax-free status.

Here are a few credit union facts you should know:

• Credit unions are exempt from paying taxes only if they operate as a non-profit
• Credit unions provide traditional banking services for their clients and offer the best banking services for those who need good loan interest rates.
• Credit Unions have fewer options than a traditional bank. On the flip side, the very low interest rates more than make up for that. The unions can afford these rates because they are not publicly traded and only need to make enough money to sustain daily operations.
• In addition, credit unions have considerably fewer physical locations than banks which makes them cheaper to run but harder to offer in-person customer services.

The Different Types of Hispanic Credit Unions

There are many ways to categorize credit unions. We have split Latino credit unions into three different types based on the target audience, but there is also the categorization based on whether they are federal or state-backed and regulated.

1. Community Credit Unions

These are credit unions that offer their services to people who live and work in a particular area. These organizations provide various benefits to the community, including employment opportunities and community improvement initiatives.

2. Latino-Friendly Military Credit Unions

Many departments and industries offer employees an opportunity to join a credit union, including military service members. To make access to their services easier, Latino-friendly credit unions for service personnel have their offices located close to the military bases, sometimes even within the premises.

3. Latino College Credit Unions

Many tertiary learning institutions offer credit union accounts for students and staff members. They are an excellent way to start one’s financial life on the right note. Numerous college campuses set up a credit union on the premises that allow students to access it quickly.

Federal vs. State Credit Unions

We can split government-backed credit unions into state and federal chattered unions. Both provide similar services to their account holders. The only difference between the two is that federal credit unions are regulated by the National Credit Union Administration.

In contrast, State-chartered credit unions like those in California are regulated and supervised by the State's supervisory authority. Both of these governing bodies oversee the insurance of your deposits up to a certain pre-determined amount, usually $250,000.

Hispanic-American Banks and Credit Unions By State

These are some of the Juntos Avanzamos-designated credit unions dedicated to helping Latino communities across the US:

How to Choose the Right Credit Union

When choosing a bank or a credit union, these are the factors you should take into consideration.

Size

Larger credit unions and organizations usually offer more services and flexibility with transactions. On the other hand, smaller organizations might have better customer service.

Insurance Policy

All credit unions should be insured, so your money is protected. This ensures that members can be reimbursed in the unfortunate event that the credit union should fail. 

Accessibility

Think about how long it would take you to get to the union's offices if you need in-person services right away. If it takes more than an hour to get there, it probably isn’t a good idea to open an account there.

Benefits

A customer care agent can offer any information you need concerning company-specific protocols and offers that can benefit you as a client. You can also go online and read some of the reviews left by previous and current account holders. You can tell a lot about how a credit union values its clients by observing how they respond to customer complaints.

The Benefits of Joining a Latino Credit Union

The main benefits of these credit unions are:

Lower Interest Rates

Joining a Latino credit union allows you to borrow money at low-interest rates giving you the chance to pay back your loan comfortably.

Creating a Savings Culture

Being able to save a portion of your income plays a crucial role in good money management. Credit unions encourage their members to save by offering higher loan limits to those with better savings.

High Dividends

Credit union savings are known to attract a sizable dividend based on the amount of money you have saved up. The unions can afford this because they do not have to pay taxes, thanks to their non-profit status.

How to Join a Latino Community Credit Union

It is not hard to join a credit union as a Latino. Applicants can provide foreign identification such as a Hispanic passport or national ID. Once you have presented your application papers online, you will receive a response within a few working days. A credit union like Cooperativa Latino will also let you present documents such as your credit history, including records of rent or utility payments.