Impact Profile: Latino Community Credit Union

Racial wealth gaps in the U.S. have deep roots, and addressing the systemic inequalities that gave rise to them will take dedicated and intentional effort. The Latino Community Credit Union (LCCU) is one organization taking on this important task. 

LCCU was founded in 2000 with a mission to help close the racial wealth gap for Latinos by helping its members build generational and community wealth through homeownership. The most recent Survey of Consumer Finances, conducted every three years by the Federal Reserve, found that the average white family has nearly six times the wealth of the average Hispanic family, amounting to a wealth gap of over $1.1 million. 

The credit union, which is one of the fastest-growing in the U.S., is led and staffed by Latinos and provides bilingual financial products and education for Latinos and other communities who face systemic barriers to economic opportunity. LCCU offers mortgages in North Carolina, South Carolina, Virginia and Georgia, and has members across the country. 

Closing the Racial Wealth Gap

Among the systemic barriers to economic opportunity that Latinos and other communities of color face is limited access to financial resources and the ability to build generational wealth. Those at LCCU know homeownership is a key component, as Latino homeowners have four times more wealth than Latino households overall, or $146,800 versus $36,050. 

However, purchasing a home is traditionally a rigid process that cuts many people out. Most Latinos served by LCCU have little to no credit history, making them ineligible for federal loan programs. Part of LCCU’s work is recognizing that when existing systems fail to serve certain communities, new approaches are necessary.

Rather than relying solely on traditional credit scores, LCCU has an alternative credit program based on members’ timely bill and rent payments.

LCCU’s bilingual and bicultural staff have developed trust with the communities they serve and provide members with ongoing financial education and support.

These deep community connections help tailor financial products and services to LCCU members. For example, LCCU was the first organization to provide Deferred Action for Childhood Arrivals (DACA) Loans.

Building Robust Lending Infrastructure

LCCU is a federally insured, state-regulated institution with a low-income designation and certifications as a Community Development Financial Institution (CDFI) and Minority Deposit Institution (MDI). This robust lending infrastructure provides access to fair and affordable financial services, making the credit union a critical driver of economic equity in the Southeast. 

LCCU’s alternative credit program based on timely rent and bill payment mitigates risks associated with members who do not meet the traditional bank standards for loan qualification. The financial education and support programs, along with the credit union’s bilingual and bicultural aspects, contribute to a high repayment rate: 99.7% on $1.9 billion in loans. As a community-based credit union, LCCU does not buy or sell loans, keeping all originated loans in-house. 

Closing the racial wealth gap for Latinos will take work, and a LCCU CD gives Clean Yield investors the opportunity to help.

LCCU CDs are federally insured and provide a low-risk, fixed-income investment that may be appropriate for both accredited and non-accredited Clean Yield clients interested in a high-impact CDFI investment. 

Learn more about Latino Community Credit Union.