Comunidad Latina Credit Union offers exemplary financial services

Consumer Action reminds you that it’s important for consumers to shop around when looking for banking services. It’s always a good idea to compare account and loan product interest rates and terms among different banks as well as comparing bank offerings with what’s available at credit unions. A local credit union might offer more attractive interest rates on savings accounts as well as on consumer loans.

Sometimes credit unions offer products that are simply not commonly offered by banks. Consider the case of Comunidad Latina Federal Credit Union, a California based credit union serving those who live, work, worship or attend school in Santa Ana, a city with a high concentration of low income immigrants. The credit union, which is part of Consumer Action’s network, offers innovative products that help bring the “unbanked” into the financial mainstream and away from overpriced fringe services.

According to Comunidad Latina’s CEO Terry Agius, Santa Ana’s residents can be especially vulnerable to fringe financial services. She explained that 76% of Santa Ana’s residents are Latino and low income (belonging to families with annual incomes below $42,000 annually), and 50% of this 76% are unbanked. Agius noted that people who don’t open accounts are often afraid to do so or don’t trust banks.

Comunidad Latina goes to great lengths to make underserved community members feel welcome. Agius, recently told Consumer Action about a member who had nowhere to turn but to the credit union when she needed a loan to buy a child’s safety seat. While such a loan would be unheard of in most financial institutions, Comunidad Latina came through.

Below are highlights of some of the other consumer friendly services that Comunidad Latina offers. Although Consumer Action does not endorse the services or products of any particular agency, we believe that Comunidad Latina’s services serve as an example of the types of services consumers and their advocates should expect from local banks and credit unions.

ITIN Loans

Comunidad Latina offers new and used auto loans for people who may have only a consular ID card for identification and an Individual Taxpayer Identification Number (ITIN) for tax purposes. Interest rates on these loans range from 6% to 18%. Agius points out that the alternative would be dealer–originated subprime loans at rates of 25% to 30%. She added that someone who has been with the same employer for three to five years, even if they’ve never used credit, may qualify for loan.

Agius explained that a consumer with no credit history would get an 18% interest rate, noting that after a period of on-time payments the credit union may re-write the note to a lower interest rate.  She also explained that as a credit union and a non-profit, interest income earned by Comunidad Latina is used to benefit the credit union’s membership.

Low cost check-cashing

Individuals who are not members of the credit union and members with less than $300 on deposit can cash checks for a 1% fee. (Agius cites that other check cashing services charge a 2.5% to 4% fee.)

Immigration and legal fee loans

Comunidad Latina members can also borrow money to help pay for costs related to obtaining permanent residence cards, citizenship, deportation/removal/detention proceedings, and employment and family-based immigrant visa petitions.

Loan applicants will need a verifiable source of income and must become credit union members by depositing at least $2 in an account.

Free financial counseling for members

This service is provided through BALANCE, a San Francisco-based financial fitness program, and includes help with debt management plans, budgeting, etc.

Money transfers

Offers cross border money transfers, and low cost domestic and international wire transfers, for sending money to immigrants’ families back home.

Auto insurance

Comunidad Latina also offers auto insurance. Program highlights include low down payments, accident forgiveness, no broker fees, foreign drivers’ license acceptance and more.

Consumer Action educational publications

Comunidad Latina offers Consumer Action publications to customers who can benefit from them. For example, if Agius turns somebody down for a loan, she might offer the consumer a copy of Consumer Action’s Improve Your Credit or Understanding Your Credit Score brochure so he or she can improve chances of qualifying for a loan in the future.