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Language Barriers in Banking
The costs of not having a bank account
Overcoming Language Barriers in Banking
What is it being unbanked or underbanked?
What percentage of people living in United States are unbanked?
What issues do bank language barriers cause?
Are banks equipped with translators?
The Bottom Line
Personal Finance Banking
Overcoming Language Barriers in Banking
Language barriers make it hard for some people to be able to access banking services
By Rebecca Lake
This article was published on December 02, 2022.
Fact checked by Suzanne Kvilhaug
In the United States, language barriers could hinder non-English-speaking people to use banking services. Therefore, the process of paying bills and saving is more difficult.
About one in 12 residents within the U.S. speak limited English, and many are unbanked.1 However, today banks like the Consumer Financial Protection Bureau (CFPB) and community banks are making efforts to bridge the gap in language to help more people have access to the banking services they need.
Let's look at the impact of the language barrier in banking and how they can be taken care of.
The most important takeaways
People who aren't fluent in English within the United States may not have easy access to banking services they require.
An estimated 4.5% of the U.S. population is unbanked, meaning that they don't have bank accounts or have access to traditional banking products or services.2
Hispanic households account for 12.2 percent of the bank-inactive people.
Language barriers can make it difficult for non-native English users to gain access to banking services. This can make paying bills and saving money more difficult.
Initiatives of organizations like the Consumer Financial Protection Bureau (CFPB) and community banks are helping bridge the language gap.
Language barriers in banking
The language barrier can affect the accessibility of financial services for people. Around 5% of people within the U.S. were unbanked, or had no bank account, in 2020.3 However, the proportion of communities that are where English is not the first language is much more. For instance, in Hispanic households, in which Spanish is often the primary langue, 12.2 per cent aren't banked according to the 2019 Federal Deposit Insurance Corp. (FDIC) data.4
Nearly 22% of the U.S. population speaks a language other than English at home - that's 67.3 million people.5 A majority of them are fluent in English, but many aren't. Over one-in-12 people older than 5 are restricted English proficient (LEP) this means they can speak English less than well.1
People and communities not proficient in English can find it difficult to access 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 available in languages other than English. Furthermore, newcomers might have difficulty understanding how bank accounts, investments, and other financial products operate in the U.S.1
The Consumer Financial Protection Bureau (CFPB) provides numerous online tools to help Spanish users to better comprehend U.S. banking concepts, products, and services.
The Costs of Being Unbanked
It is costly to have a language barrier make you bankless or underbanked. This means you have a bank account but you also have other financial services.
People who aren't well serviced by banks that are mainstream typically use more costly financial services. For instance, cashing check services can charge fees ranging between 1% and 12% on the total check amount.6 It could cost you $10 to $120 to cash a $1,000 check. Banks are able to cash checks for noncustomers, however, this could mean paying a fee of $5 to $10. For people who get the check due to the fact that they don't have a bank account, these fees can amount to thousands of dollars each year.
It can also be expensive if you rely on alternative banking services. Options such as payday loans or car title loans are significantly higher in rates of interest than traditional personal loans. Payday loans typically have an annual percentage rate (APRs) at 300% and more could create the cycle of debt that's difficult to escape.7
Each state has different laws regarding payday lending and the interest rates and fees may be charged by lenders. Certain payday loans are considered predatory and are not permitted in some states.8
Overcoming Language Barriers in Banking
In recent times there has been a increasing awareness of the effects of language barriers on access to banking and financial health. Both financial service companies and federal agencies are trying to tackle this issue.
For instance, Mitchell Bank in Milwaukee is among the banks which are opening branches in the areas of low-service. The bank has a branch named Cardinal Bank in a Milwaukee high school, which has a 70% Hispanic immigrant population.9 Cardinal Bank offers financial literacy classes, which help customers with no Social Security numbers apply to apply for Internal Revenue Service (IRS) Individual Taxpayer Identification Numbers (ITINs), and uses an FDIC money smart program in order to teach the financial literacy of students and their parents.63
Individuals with restricted English proficiency are able to look to 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 that offer services, education, and outreach in other languages.
In addition, The Consumer Financial Protection Bureau (CFPB) offers support for people with limited English proficiency. Contact (855) 411-2372 for assistance in more than 180 different languages. The CFPB also provides educational materials on banking in dozens of languages.10
Note
In addition to the need to address difficulties with language, the financial and banking institutions too are taking measures to make banking accessible for people with hearing and speech disabilities, cognitive disabilities, and visual impairments.
What is it that it means to be underbanked or unbanked?
Unbanked is a term used to describe a situation where you do not have a bank account. Being underbanked means the fact that you do have a financial institution accounts, but you also use alternative financial services, such as check cashing as well as payday loans.
How many people in the United States are unbanked?
Around five percent of the U.S. population, or 7.1 million households, were unbanked at the time of May 2021. The number of households without banks was higher in Hispanic, Black, and low-income families.3
What are the problems that language barriers in banking cause?
Language barriers can make people with limited English proficiency (LEP) less likely to seek out banking and financial services. This can make it harder in managing their money, paying their bills, and save money. Additionally, they are more likely to utilize expensive banking options, like check cashing services as well as payday loans.
Do banks have translators?
Banks are able to use automated tools for interpretation and translation to communicate with customers who have limited English proficiency. Banks are increasingly hiring translators and interpreters who can communicate with customers on the phone or in person.
The Bottom Line
Language obstacles can make it difficult for those with limited English to obtain the banking services or products they require, however steps are being taken to tackle this issue in the U.S. As the banking industry becomes more inclusive individuals with less English proficiency might have a better chance of opening bank accounts or apply for loans, and manage their finances without having to pay high fees in the process.
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Article Sources
Related Articles
What to look out for when Opening a Savings Account at a Bank
Banking
How can immigrants Access Financial Services
Woman in the front of ATM
Financial Literacy
How to Go From Unbanked or underbanked
The history of lending discrimination
Mortgage
The History of Lending Discrimination
Students in a Classroom Auditorium
Student Loans
Student Loan Debt by Race
A woman and her daughter are shopping with SNAP benefits to eat.
Government & Policy
Government Assistance Programs
Businessmen
Banking
Black-Owned Banks by State
Partner Links
Related Terms
What Is an Banking Desert?
A bank desert is a place that doesn't have any banks operating within its vicinity. Discover why deserts in banking are a concern for consumers.
More
Unbanked Definition
Unbanked is the term used to describe those who do not utilize banks or banks in any way.
More
Dodd-Frank Act: What It Does, Major Components, Criticisms
The Dodd-Frank Wall Street Reform and Consumer Protection Act is a series of federal regulations passed to prevent future financial crises.
More
What Is the definition of a financial Coach?
The term "financial coach" refers to a person who gives motivation and guidance to help people with money-related issues. Sometimes their services are free.
more
Fair Housing Act
The Fair Housing Act is the federal law forbiding discrimination in the housing market based on race, gender or religion and nationality, disability and family status.
more
What is a Payday Loan? What is it, how to Get One and the Lawfulness
A payday loan is a type of loan that is short-term in nature. A lender will extend high-interest credit dependent on your earnings.
More
If you have any thoughts regarding the place and how to use Payday Loans Near Me - startentrepreneureonline.com,, you can get in touch with us at our own web-page.
The costs of not having a bank account
Overcoming Language Barriers in Banking
What is it being unbanked or underbanked?
What percentage of people living in United States are unbanked?
What issues do bank language barriers cause?
Are banks equipped with translators?
The Bottom Line
Personal Finance Banking
Overcoming Language Barriers in Banking
Language barriers make it hard for some people to be able to access banking services
By Rebecca Lake
This article was published on December 02, 2022.
Fact checked by Suzanne Kvilhaug
In the United States, language barriers could hinder non-English-speaking people to use banking services. Therefore, the process of paying bills and saving is more difficult.
About one in 12 residents within the U.S. speak limited English, and many are unbanked.1 However, today banks like the Consumer Financial Protection Bureau (CFPB) and community banks are making efforts to bridge the gap in language to help more people have access to the banking services they need.
Let's look at the impact of the language barrier in banking and how they can be taken care of.
The most important takeaways
People who aren't fluent in English within the United States may not have easy access to banking services they require.
An estimated 4.5% of the U.S. population is unbanked, meaning that they don't have bank accounts or have access to traditional banking products or services.2
Hispanic households account for 12.2 percent of the bank-inactive people.
Language barriers can make it difficult for non-native English users to gain access to banking services. This can make paying bills and saving money more difficult.
Initiatives of organizations like the Consumer Financial Protection Bureau (CFPB) and community banks are helping bridge the language gap.
Language barriers in banking
The language barrier can affect the accessibility of financial services for people. Around 5% of people within the U.S. were unbanked, or had no bank account, in 2020.3 However, the proportion of communities that are where English is not the first language is much more. For instance, in Hispanic households, in which Spanish is often the primary langue, 12.2 per cent aren't banked according to the 2019 Federal Deposit Insurance Corp. (FDIC) data.4
Nearly 22% of the U.S. population speaks a language other than English at home - that's 67.3 million people.5 A majority of them are fluent in English, but many aren't. Over one-in-12 people older than 5 are restricted English proficient (LEP) this means they can speak English less than well.1
People and communities not proficient in English can find it difficult to access 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 available in languages other than English. Furthermore, newcomers might have difficulty understanding how bank accounts, investments, and other financial products operate in the U.S.1
The Consumer Financial Protection Bureau (CFPB) provides numerous online tools to help Spanish users to better comprehend U.S. banking concepts, products, and services.
The Costs of Being Unbanked
It is costly to have a language barrier make you bankless or underbanked. This means you have a bank account but you also have other financial services.
People who aren't well serviced by banks that are mainstream typically use more costly financial services. For instance, cashing check services can charge fees ranging between 1% and 12% on the total check amount.6 It could cost you $10 to $120 to cash a $1,000 check. Banks are able to cash checks for noncustomers, however, this could mean paying a fee of $5 to $10. For people who get the check due to the fact that they don't have a bank account, these fees can amount to thousands of dollars each year.
It can also be expensive if you rely on alternative banking services. Options such as payday loans or car title loans are significantly higher in rates of interest than traditional personal loans. Payday loans typically have an annual percentage rate (APRs) at 300% and more could create the cycle of debt that's difficult to escape.7
Each state has different laws regarding payday lending and the interest rates and fees may be charged by lenders. Certain payday loans are considered predatory and are not permitted in some states.8
Overcoming Language Barriers in Banking
In recent times there has been a increasing awareness of the effects of language barriers on access to banking and financial health. Both financial service companies and federal agencies are trying to tackle this issue.
For instance, Mitchell Bank in Milwaukee is among the banks which are opening branches in the areas of low-service. The bank has a branch named Cardinal Bank in a Milwaukee high school, which has a 70% Hispanic immigrant population.9 Cardinal Bank offers financial literacy classes, which help customers with no Social Security numbers apply to apply for Internal Revenue Service (IRS) Individual Taxpayer Identification Numbers (ITINs), and uses an FDIC money smart program in order to teach the financial literacy of students and their parents.63
Individuals with restricted English proficiency are able to look to 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 that offer services, education, and outreach in other languages.
In addition, The Consumer Financial Protection Bureau (CFPB) offers support for people with limited English proficiency. Contact (855) 411-2372 for assistance in more than 180 different languages. The CFPB also provides educational materials on banking in dozens of languages.10
Note
In addition to the need to address difficulties with language, the financial and banking institutions too are taking measures to make banking accessible for people with hearing and speech disabilities, cognitive disabilities, and visual impairments.
What is it that it means to be underbanked or unbanked?
Unbanked is a term used to describe a situation where you do not have a bank account. Being underbanked means the fact that you do have a financial institution accounts, but you also use alternative financial services, such as check cashing as well as payday loans.
How many people in the United States are unbanked?
Around five percent of the U.S. population, or 7.1 million households, were unbanked at the time of May 2021. The number of households without banks was higher in Hispanic, Black, and low-income families.3
What are the problems that language barriers in banking cause?
Language barriers can make people with limited English proficiency (LEP) less likely to seek out banking and financial services. This can make it harder in managing their money, paying their bills, and save money. Additionally, they are more likely to utilize expensive banking options, like check cashing services as well as payday loans.
Do banks have translators?
Banks are able to use automated tools for interpretation and translation to communicate with customers who have limited English proficiency. Banks are increasingly hiring translators and interpreters who can communicate with customers on the phone or in person.
The Bottom Line
Language obstacles can make it difficult for those with limited English to obtain the banking services or products they require, however steps are being taken to tackle this issue in the U.S. As the banking industry becomes more inclusive individuals with less English proficiency might have a better chance of opening bank accounts or apply for loans, and manage their finances without having to pay high fees in the process.
Sponsored
Reliable, Simple, Innovative CFD Trading Platform
Are you in search of a reliable CFD trading platform? With Germany's No. CFD Provider (Investment Trends for 2022), Plus500 is a licensed CFD provider that is protected by SSL. The platform allows you to exchange CFDs on the most well-known markets in the world and take advantage of the endless opportunities for trading. Choose from over 2,000 financial instruments and receive free, real-time quotes. Learn more about trading with a reputable CFD provider and try the demo free of charge today.
86% of retail CFD accounts lose money.
Article Sources
Related Articles
What to look out for when Opening a Savings Account at a Bank
Banking
How can immigrants Access Financial Services
Woman in the front of ATM
Financial Literacy
How to Go From Unbanked or underbanked
The history of lending discrimination
Mortgage
The History of Lending Discrimination
Students in a Classroom Auditorium
Student Loans
Student Loan Debt by Race
A woman and her daughter are shopping with SNAP benefits to eat.
Government & Policy
Government Assistance Programs
Businessmen
Banking
Black-Owned Banks by State
Partner Links
Related Terms
What Is an Banking Desert?
A bank desert is a place that doesn't have any banks operating within its vicinity. Discover why deserts in banking are a concern for consumers.
More
Unbanked Definition
Unbanked is the term used to describe those who do not utilize banks or banks in any way.
More
Dodd-Frank Act: What It Does, Major Components, Criticisms
The Dodd-Frank Wall Street Reform and Consumer Protection Act is a series of federal regulations passed to prevent future financial crises.
More
What Is the definition of a financial Coach?
The term "financial coach" refers to a person who gives motivation and guidance to help people with money-related issues. Sometimes their services are free.
more
Fair Housing Act
The Fair Housing Act is the federal law forbiding discrimination in the housing market based on race, gender or religion and nationality, disability and family status.
more
What is a Payday Loan? What is it, how to Get One and the Lawfulness
A payday loan is a type of loan that is short-term in nature. A lender will extend high-interest credit dependent on your earnings.
More
If you have any thoughts regarding the place and how to use Payday Loans Near Me - startentrepreneureonline.com,, you can get in touch with us at our own web-page.
