Five Ways You Can Reinvent Payday Loans Near Me 550 Without Looking Like An Amateur

Notice: Trying to access array offset on value of type null in /srv/pobeda.altspu.ru/wp-content/plugins/wp-recall/functions/frontend.php on line 698

Language Barriers in Banking

The Price of Not Being Banked

Overcoming Language Barriers in Banking

What is it being unbanked or underbanked?

What percentage of people living in United States are unbanked?

What are the problems that banks’ language barriers create?

Does the bank have translators?

The Bottom Line

Personal Finance Banking

The challenge of overcoming language barriers in banking

Language barriers make it difficult for some to get access to banking services

By Rebecca Lake

Published December 02, 2022

Fact checked by Suzanne Kvilhaug

Within the United States, language barriers make it difficult for non-English speakers to access banks, which means paying bills and saving money may be more difficult.

One in 12 people living in the U.S. speak limited English and a large portion of them are unbanked.1 However, today, banks like the Consumer Financial Protection Bureau (CFPB) and community banks are working to reduce the language gap to ensure that more people have access to the banking services that they require.

Let’s take a look at the consequences of language barriers in banking and how they are being dealt with.

Important Takeaways

People who have limited English within the United States may not have the ease of access to banking services they need.

An estimated 4.5% from the U.S. population is unbanked which means they do not have a bank account or are using traditional banking products or services.2

Hispanic households make up 12.2 percent of the unbanked population.

Language obstacles can make it difficult for non-native English people to get access to banking services. This could make paying bills or saving funds more challenging.

Initiatives of the Consumer Financial Protection Bureau (CFPB) and community banks are helping to close the language gap.

Language barriers in banking

Language barriers can hinder the accessibility of financial services for people. About 5% people living in the U.S. were unbanked, or had no bank account, in 2020.3 But the rate for communities that are where English isn’t the main language is much more. For instance, among Hispanic households, where Spanish is usually the predominant language, 12.2% are unbanked as per the 2019 Federal Deposit Insurance Corp. (FDIC) data.4

A whopping 22% or more of U.S. population speaks a language other than English at home, which is 67.3 million people.5 A lot of these people are fluent in English, but many aren’t. Over one-in-12 adults over 5 is considered in the range of being limited English competent (LEP) which means that they can speak English not very well.1

People and communities that are not fluent in English can find it difficult to gain access to banking services in the U.S. Even if banks provide basic account information or customer services in a range of languages financial disclosures and written documents may not be accessible in other languages that English. Additionally, foreigners may have difficulty understanding how bank accounts, investments and financial products work in the U.S.1

The Consumer Financial Protection Bureau (CFPB) provides numerous online tools to assist Spanish speakers to better comprehend U.S. banking concepts, products and services.

The costs of not having a bank account

It can be costly to have a language barrier cause you to be unbanked or underbanked. This means you have a bank account , but also use other financial services.

People who aren’t well provided by the mainstream banks typically depend on more costly financial services. For instance, cashing check services may charge fees that range between 1% and 12% of the check amount.6 This could mean that you pay between $10 and $120 to cash a $1,000 check. Banks may cash checks for noncustomers, but it could still mean paying a fee of 5 to $10. If you are the check due to the fact that they don’t have a banking account, these fees can be thousands of dollars each year.

The process of borrowing money can be expensive if you rely on alternative banking services. Solutions such as payday loans or car title loans have significantly higher interest rates than traditional personal loans. Payday loans, often with annual percentage rates (APRs) that are 300% or higher could create the cycle of debt that is difficult to escape.7

Each state has different laws regarding payday loans which include what rates of interest and charges can be imposed by lenders. Some payday loans are considered predatory and are prohibited in certain states.8

Overcoming Language Barriers in Banking

In recent years, there has been a increasing awareness of the effects of language barriers in limiting access to financial services and banking. Financial services firms and federal agencies are trying to address this problem.

For instance, Mitchell Bank in Milwaukee is one of the banks that are that are opening branches in areas with low service. The bank has a branch named Cardinal Bank in a Milwaukee high school with a 70% Hispanic immigrant population.9 Cardinal Bank offers financial literacy classes, which help customers who do not have Social Security numbers to apply for Internal Revenue Service (IRS) Individual Taxpayer Identification Numbers (ITINs), and uses the FDIC money smart program in order to help develop money skills for students and their parents.63

People who have limited English proficiency may also seek out government programs for help with banking services. A lot of states and cities have local immigrant advocacy organizations that can direct people to local banks offering services, education and outreach in different languages.

In addition there is The Consumer Financial Protection Bureau (CFPB) provides assistance to people with limited English proficiency. Call (855) 411-2372 to get assistance in more than 180 languages. The CFPB also offers free education materials about banking in a variety of languages.10

Note

Alongside dealing with difficulties with language the financial and banking institutions too are taking steps to make banking more accessible for people with hearing and speech disabilities, cognitive disabilities, and visual impairments.

What does it mean being unbanked or underbanked?

Unbanked is a term used to describe a situation where you don’t have a bank account. Underbanked means having a banking account, however, you are also using alternative financial services, like check cashing services as well as payday loans.

In what percentages of the United States are unbanked?

Approximately 5percent out of U.S. population, or 7.1 million households, was not banked in May 2021. The number of unbanked households was disproportionately higher among Hispanic, Black, and low-income families.3

What issues do bank language barriers cause?

Language barriers can make those with low English proficiency (LEP) more hesitant to use banking or financial services. This could make it harder in managing their money, paying their bills and save money. Additionally, they are more likely to make use of expensive banking options, for example, check cashing service and payday loans.

Do banks have translators?

Banks are able to use automated tools for interpretation and translation to reach out to customers who have limited English proficiency. More banks are hiring translators and interpreters who are able to communicate with customers over the over the phone, or even in person.

The Bottom Line

Language obstacles can make it difficult for those with limited English to obtain the banking services or products they need, but steps are being taken to combat this problem within the U.S. As the banking industry expands those with limited English proficiency may be able to open bank accounts and apply for loans, and manage their financial health without incurring high fees in the process.

Leave a Comment Отменить ответ