Better access to banks can help Latinos recover after disaster »Yale Climate Connection

For many Americans, a bank account is a basic financial tool – everything from paying bills to savings in the future. But for millions of Latinos throughout the United States, opening a bank account is not as easy as walking into the nearest branch. In many communities, mainstream banks choose scarce, financial jargon is daunting, and trust in institutions remains low.

As climate disasters intensify, the stakes are even higher. Without traditional banking, many families struggle to recover from unemployment, property damage and unexpected emergencies.

According to the latest data, about 10% of Latinos are considered “unbanked”, meaning they lack checking or savings accounts, but rely on alternatives (usually expensive financial services), which makes it even more difficult to establish financial stability.

Unidosus, the Latino advocacy group, is working to change that change by bridging the gap between financial institutions and the Latino community. Through financial education, policy advocacy and community partnerships, Unidosus can help Latinos access banking services, build credit and protect their financial futures.

In an interview with Yale Climate Link, Mauricio Garcia of Unidosus revealed why so many Latinos don’t have silver services, how this financial exclusion makes them particularly vulnerable to climate disasters, and how to build trust for building banking institutions.

This interview was edited for clarity and simplicity.

Yale Climate Connection: What is the reason people may not have a bank account?

Mauricio Garcia: There are many reasons. In some areas and communities, Latino concentrations are high, especially those with poor working or middle-income Latinoes, without the prevalence of mainstream banking [options] Generally speaking. Therefore, it is often the lack of options in the respective communities.

In some cases, the family is new to the country. If they were only here for a few years, then there might be concerns [their] Make money from an institution [they’re] Not familiar with it. Sometimes, there is a language barrier.

Then, generally, it is very complicated to understand how to choose a bank from a second bank. This is where financial education plays a big role in all of this. What are all these terms using? How much do I have to pay? How much do I need? Therefore, having such navigation needs to happen is often complicated.

One big thing is trust. The Latino community and Latino families do not know these institutions. They may see ads on TV, but they don't have that kind of trust.

All the people who come together and get together really raise people who don’t have accounts.

We're talking about people without accounts, but [just] Just as important [are] People on the bill, people who may be using financial service providers and financial products, but they are not those who should be using due to high fees, or they may be predatory services. Unfortunately, there are a lot of Latinos and others who are taking advantage of these services, and in fact, they should probably do something that doesn’t cost money to manage their own finances.

YCC: How does your organization strive to reach the banklessness of Latinos?

Garcia: Unidosus is committed to increasing wealth, promoting health and building the power of Latino communities, especially those with multiple barriers to opportunity. We do it mainly through efforts around policy and advocacy. So we are working closely with people in Congress. We are working closely with other partners to ensure there are some policies that undermine some opportunities.

We do this programmatically, too. We designed plans to implement at the local level [our] More than 300 community-based members. Because we are a national entity, we do not work locally. We rely on – and work with – to share resources with members of the Latino community.

Every Latino community has different differences, so we try to adapt these services. That's why we tilt [on] and work with our members. They are fountains of information, whether it is education, workforce training, information about food, nutrition, safety, signing snapshots or Medicaid, or something of this nature. This also includes providing education on financial best practices.

We provide financial guidance nationwide. We have a financial authorization network that is truly powered by community partners. But in the end, the information we provided to local people was reviewed. We did a lot of research so we know what is a good product and what is not a good product, so we rely on this community partnership to make sure our community understands what is there, work carefully and what kind of things you can do to plan better plans even if you feel like you can’t save a dollar a day.

YCC: With so many predatory loans and a lack of trust in financial institutions, how do you help people overcome these barriers to trust?

Garcia: This must have a personal feeling, I have been back to my local partner. Whether they are service providers like nonprofits that offer vocational training, faith-based institutions, local schools, and depending on the community, local elected officials – they have enough footprints in the community – over the years they have become messengers of trust, people will trust them. This is where the source of information is crucial and why it is important for a network of countries like Unidosus to have such presence locally. This is where we spend most of our time on educational articles, why it’s important to ensure it is important, why it’s important to switch your banking business than to help you. It is crucial to be committed to educating on the ground and providing resources effectively.

There are a lot of nonprofits working in the community to advance and provide the necessary support, in some cases, but overall the sector as a whole, in terms of the amount of demand there. Here, organizations like Unidosus and other similar organizations are important, so we can start to help provide other support for other support to help these organizations do what they need to do every day.

Our goal is to ensure that messaging (from what is important to save the cause or how to respond to climate events or climate disasters to incorporate emergency response and emergency funding) is a collective effort. Everyone is involved and raise awareness of how to do it, it is a complete activity. This is not all our community-based partners because they are tied to resources and capabilities.

YCC: Why isn’t an account making people particularly vulnerable during and after climate disasters?

Garcia: This is the ability for people to have some kind of rainy fund – able to withstand and have resilience [crises]. As we see now in Los Angeles, many people don’t have homeowners’ insurance or condo insurance. Part of that is because they can’t get funds for rainy days: they don’t have any savings or can’t make ends meet. These are extreme cases, but they are no longer as extreme – they are becoming more and more frequent.

If you can hardly make ends meet, you may be a cash maker (a laborer) and you are getting paid that day and it is hard to think about “Oh, I'm going to have 40 hours of work next week.” You don't know. There is uncertainty in labor.

You can't go to work because of increased calories, or because of a wildfire or flooding, which resulted in labor losses. In Los Angeles, one of our branches supports small businesses, especially MA and PA food truck suppliers, who are day workers, people working outside. All of these people – even if they have some savings – no longer have jobs. Their homes no longer exist and/or cannot find a job due to climate impacts.

Read: Climate change makes deadly LA wildfires 35% more likely

But every day, all the different responsibilities and costs are considered, and now when considering inflation, it is often hard to think of: “Well, how do I throw my money away for a goal but a goal?” Most families, whether you are Latino or not, have a hard time building a reserve of resources to be able to handle some of these new challenges that won’t affect the Latino community in many ways.

So, even before we understand these things, how do we start saving when not building systems for people? Have all these educations [needed]there are all kinds of pitfalls, such as predatory banking services, [which] There is still a large proportion of black and brown communities, including the Latino community. Therefore, it is important that everything we can do to mitigate some accumulated losses. This is not a politicization, it is the reality of what we live in.

YCC: Are there any challenges in accessing relief assistance without a bank account?

Garcia: have. Fortunately, in many cases, when relief aid is provided or responsive services are provided, they often experience trusted messengers, such as community-based organizations that have history in their respective communities or communities, local elected officials, and anchorage institutions such as higher education, high schools and school districts. So this ended up in many communities and many families.

But there are other opportunities to seek assistance through banking institutions and insurance, which many have not. So it does create obstacles there, especially around messaging. Among many reasons, we think one of the reasons people need to store is because it is a variety of different sources of information [things]whether it's your checking account or how to take advantage of FEMA's resources.

YCC: Why is this a particularly important question as climate changes?

Garcia: Climate change has exacerbated what we already know, namely, barriers to financial liquidity, barriers to saving, barriers to building generational wealth, and more specifically, it is exacerbating it because it is so unknown.

Yes, we know that in California, wildfires have become more common over the past five to ten years. But do we know that we will have a situation where one of the most populous regions in the world – now the state? And know that we would say that the water rate for the homeowner is near the water, [or] who [in areas] More easily prone to wildfires or floods, insurance soaring, or disappearing completely in some cases? Who lives in those communities? Latino, working class.

Latinos are disproportionately affected by this climate crisis. It's a crisis, and unless our investments really mitigate the crisis, it's a crisis. So we can work collectively across communities, organizations and parties, and the more we can address these existing threats that will continue to evolve.

[We need] More resources, more partnerships, frankly, more awareness. This means having conversations around financial inclusion or climate in a way that people can understand and truly apply to everyday life. So that's why empowering financials is so important – to understand and prepare for fast and angry events every day.