Michigan on Monday approved a charter for Superbia Credit Union, a new financial institution designed specifically for LGBT customers. The approval clears the way for online service to begin early in 2020.
“It’s burdensome that gay and trans Michiganders must depend on private businesses to take it upon themselves to provide equal treatment to employees and consumers," Sen. Jeremy Moss told the Oakland Press. “Fortunately, many LGBTQ business owners and entrepreneurs have stepped up to specifically cater to the needs of our community, and I’m especially excited to welcome in Superbia Credit Union to Michigan as a safe space to bank and obtain lines of credit without fear of discrimination.”
The goal of creating Superbia was to eliminate discrimination and provide better economic options for the entire LGBTQ community. Superbia will serve its members in three important ways: Providing fair, non-discriminatory and unique products, services, and treatment that honors the unique needs of the LGBTQ community; putting profits back into Superbia to offer better saving and lending rates, and other improved services to its members; and awarding up to 30% of remaining profit to directly fund LGBTQ organizations, causes and community needs.
“I can walk into a bank or credit union and apply for a loan or credit card or savings accounts and frankly, [have] no problem,” Superbia founder Myles Meyers told Bloomberg. “If I walked into the same institution with my husband, we can come across different responses and welcome. And this is where it all starts to change for the community.”
As a virtual credit union, Superbia will have the typical online and mobile apps that all customers have come to expect from a financial institution, as well as checking and savings accounts, CDs, credit cards, short-term loans, mortgages, lines of credit, and small business accounts. Eventually, Suburbia plans to expand into products such as insurance, health care and wealth management specifically designed for LGBT customers. With the charter in place, Superbia will form a board and begin hiring executives.
Plenty of LGBTQ community members are customers and members of more traditional banks and credit unions, but they are not explicitly protected from discrimination in federal lending laws, and a majority of states don’t have regulation on the books prohibiting housing and accommodation discrimination against LGBTQ people, meaning that sexual orientation or gender may be considered in accessing credit.
A 2018 study by Freddie Mac found that the LGBTQ homeownership rate of 49% is considerably lower than the national rate of 64.3%.
Even for those couples who are approved for a mortgage, they’re more likely to pay more for it. Same-sex partners were 73% more likely to be denied a loan than male-female couples with the same financial profile, according to a study by Iowa State University’s Ivy College of Business, which analyzed more than 30 million U.S. home loans from 1990 to 2015. Those same-sex couples who were approved faced higher fees, which added up to as much as $86 million a year, according to the research, published by the Proceedings of the National Academy of Sciences.
The discrimination extends to heterosexual couples as well; Once a same-sex population increases in a neighborhood, rejection rates and fees rise for other borrowers in the neighborhood, the study found.
Superbia Credit Union is the first ever profit-for-purpose financial institution, as a member-based credit union, to be built by an LGBTQ entrepreneur and 100% focused on serving and advocating for the LGBTQ community. It is, however, an inclusive organization, and anyone supporting their mission and mandate is welcome to join and become a member.
Superbia has already established relationships with LGBTQ organizations including Hornet Networks and Stonewall Community Foundation, as well as payments and financial companies including Mastercard and CU*Answers, which will help power their financial offerings.
A recent Gallup poll cites 4.5% of American adults identifying as LGBTQ, which is more than 10.7 million people. The combined buying power of those 10.7 million people was estimated at $987 billion in a 2017 projection by Witeck Communications.
Still, poverty exists in the diverse LGBTQ community at levels well above the national norms, Meyers said in a previous statement, and widespread discrimination persists as more than one in four LGBTQ people have reported being treated unfairly simply because they are LGBTQ. Superbia represents a new way to combat discrimination and harness the economic and social power of the LGBTQ community, as well as the individuals and families within it.
“The LGBTQ community is strong and persistent,” said Meyers. “We’ve been working with, and will continue to work with, the community to improve economic equality by removing the risks of intolerance and discrimination in banking services that continue to plague the community in different forms. ... We are extremely appreciative to the Michigan DIFS for its efforts on our application and the signing of the executive order to form Superbia Credit Union.”
Superbia Credit Union will also offer products which are often outside the scope of a more traditional lender, such as loans for transgender people in the process of transitioning, according to Meyers.
Supporters hope that this is just the first in a growing movement. Superbia is in partnership with the LGBTQ Credit Union Coalition, a nonprofit organization headquartered in the San Francisco Bay Area, whose goal is to propose and launch a national LGBTQ credit union by the end of 2023.