New Perspectives on Equity & Inclusivity
To make a real difference in the communities they serve, CUs must consider inequality from multiple and unexpected angles.
What first comes to mind when someone mentions diversity, equity and inclusion (DEI) in the context of credit unions? Chances are, it’s a commonly-discussed practice like hiring and promoting more people of color, or expanding the credit union’s financial services to underserved individuals, such as by offering ITIN loans to immigrants who lack Social Security numbers.
While these types of actions are important, to truly make a difference credit unions must go deeper and consider new places, beyond the ones that have been visited over and over, where inequality might exist.
A couple of recent virtual events hosted by Filene Research Institute and Inclusiv included presentations about new ways to look at and work to resolve inequality. Here’s a peek at a few that might spark new conversations at your credit union.
Remote Worker Inequality
The pandemic turned remote work mainstream, and many of us are still logging on from home with no plans to stop any time soon. But have you considered that not all remote work environments are created equal, or that allowing a portion of staff to work remotely might be unintentionally creating inequality across the organization?
In a recent Filene webinar on employee retention, “The Proof Is in Them Staying,” Community Development Director Cortney Angeley discussed the importance of considering organization-wide equity as it relates to the allocation of resources. She noted that 42% of the U.S. workforce has worked from home during the pandemic, and to do so effectively, they needed stable internet, videoconferencing tools and preferably a private office space. Yet, 65% of Americans don’t have adequate internet speed that allows for videoconferencing, she said.
“We think about the ways our team members can feel successful or not feel successful, and the simple fact of being even able to set up a home office can really diminish a team member’s ability to stay at an organization,” she said. “But even if you take that out of it, say the team member has the ability to go work from home and that’s an easy thing for them, another piece of the puzzle to consider is, how do we help those team members get promotions when they’re losing out on the face time with credit union leaders that is really going to help them get to the next level?”
Technology Access Inequality
Just as not every worker has access to fast, reliable technology to help them succeed in their jobs at home, not every member or potential member has access to the technology many of us take for granted. During Inclusiv’s 2021 Virtual Conference held Sept. 22-23, one speaker mentioned that while some believe fintech is the answer to bringing financial services to underserved community members who don’t live near a financial institution branch, it can in fact create more alienation.
“Technology can be part of a series of tools, however we still live in a society that has a major digital divide,” Dr. Atyia Martin, CEO of the DEI-focused consulting firm All Aces, said. “There’s some research that’s been done nationally that shows that although there’s wide adoption of cell phones, when you start to look at demographics of people across this country, there are large percentages of people who do not have smartphones. So we’re designing apps that exclude people, and we don’t mean to, but it’s also an opportunity. We can begin to investigate ways to help break some of that down – what are some of the approaches that leverage plain text as access to things? What are some approaches that help invest in more technology infrastructure in communities that are struggling?”
Energy Burden Inequality
A 115-degree heat dome over the Pacific Northwest and Hurricane Ida’s assault on Louisiana are just two of the presents extreme weather has delivered to the U.S. so far this year, and Mother Nature’s unwanted shower of gifts is expected to continue flowing. Many of us may not have considered the link between inequality and climate change, but it’s time we did.
During Inclusiv’s conference, Neda Arabshahi, director of the Inclusiv Center for Resiliency and Clean Energy, presented the following stats on energy burden in the U.S., which can be defined as the percentage of one’s gross household income that is spent on energy costs:
- The average energy burden for low-income households is three times higher (8.6%) than for non-low-income households (3%).
- Black households spend 43% more of their income on energy costs than white households.
- Hispanic households spend 20% more and Native American households spend 45% more.
Substantial recent growth in clean energy investments, as well as ambitious goals set by the federal government to fully transition to clean energy, demonstrate how implementing cost-efficient energy solutions that are also good for the planet is more relevant today than ever. Arabshahi shared that the number of U.S. homes with solar systems is expected to double from three to six million by 2023, and from 2019 to 2020, new global investments in the clean energy transition, renewable energy and solar energy have increased by 9%, 2% and 12%, respectively. In addition, President Biden has called for 100% of the nation’s electricity to originate from clean energy sources by 2035.
Credit unions can help further the effort by lending money to fund projects or purchases that reduce households’ energy costs, such as solar or wind power systems, electric cars and structural upgrades like high-efficiency insulation, efficient boilers and windows, and zone heating controls. While a number of credit unions have embraced green loan programs, there’s a major opportunity for more to get involved. Arabshahi said 292 credit unions and cooperativas are currently either offering or developing green loan programs, which only represent about 5% of the total number of credit unions and cooperativas.
Inclusiv’s session on energy burden also featured Maurice Smith, president/CEO of Local Government Federal Credit Union ($3.1 billion, Raleigh, N.C.), who shared a local perspective on energy cost inequality and why credit unions should help solve the problem. He said in North Carolina, low-income households spend as much as 23% of their income on energy, and that Black households spend 45% more on energy than white, non-Hispanic households do. “What could your members do if they had a 20% raise because they’re not spending that on utility bills, but on things that will advance their households or community?” he asked. “The burden of climate change and utility consumerism doesn’t fall equally on all communities.”
Smith added that the biggest barrier that keeps more credit unions from embracing green lending is the misconception that it’s too complicated. “If someone wants to make home improvements that will make their home more energy efficient, or get an electric vehicle, you have the products today – they’re called home equity loans, personal loans, auto loans and credit cards,” he said. “You already make these products, it’s just the purpose of the loan that’s different. And you have the data analytics to see who needs them the most. Someone could have a good debt to income ratio but still be struggling because their income is being drained somewhere, and it’s likely to be because of energy burden.”
These days, everyone could use a crash course on opening their minds to the thoughts and experiences taking place outside of their own personal bubbles, including credit union leaders who are looking to infuse DEI into their business practices. In order to make a real difference in the communities they serve, credit unions must consider inequality from multiple and sometimes unexpected angles. And this exercise isn’t a one and done – it’s something that needs to be revisited again and again in a rapidly changing world.
Natasha Chilingerian is Executive Editor for CU Times. She can be reached at nchilingerian@cutimes.com.