4 Tips to Find a Bank that is LGBTQIA+-Friendly

Every year as Pride Month rolls around, all kinds of companies trumpet their LGBTQIA+ credentials and paint rainbow colors on their websites or social media. Unfortunately, a lot of it smacks of rainbow washing -- flying the flag without actually doing very much to support the community.

A recent LGBTQI+ Economic and Financial (LEAF) survey showed that more than one in 10 LGBTQIA+ respondents had reported discrimination when accessing financial services. Worryingly, almost a quarter of the respondents said they didn't have a checking or savings account -- which is significantly more than the national average.

If you're one of them, or you feel your current bank doesn't meet your needs, here are some tips on finding an LGBTQIA+-friendly financial institution.

1. Seek out banks that do more than pay lip service

Sadly, there aren't a lot of options when it comes to LGBTQIA+ specific banks -- particularly as Daylight, one of the first and only LGBTQIA+ banks, will close its doors at the end of June. However, Amalgamated Bank is committed to social justice across a range of issues, including supporting LGBTQIA+ rights.

There are also several bigger banks that actively support the community. For example, BMO Harris and Citibank let people choose the name that shows on their credit card or debit card. Both companies have also been named on the Human Rights Campaign Foundation's list of Best Places to Work for LGBTQ+ Equality, as has Capital One and Amalgamated Bank. More broadly, Mastercard True Name® is working with its partners to issue more cards with people's chosen names.

Pay particular attention to banks' policies on discrimination, specifically what policies they have in place to prevent prejudicial treatment based on gender identity or sexual orientation. Look to see if they have LGBTQIA+ initiatives for employees, as well as those that stretch into the wider community.

2. Check out credit unions as well as banks

The big difference between banks and credit unions is that credit unions are not-for-profit organizations that often cater to specific groups or communities. As such, some credit unions are more flexible and may be better able to offer LGBTQIA+-focused services.

Check out Element FCU, which says it has a "rainbow of banking options." It is a founding ally of CU Pride, an LGBTQ+ association for credit unions. It's also worth keeping an eye out for Superbia Credit Union, though it hasn't yet launched any financial services. It was due to kick things off in 2020, but right now all you can do is become a member and sign up for its accounts as and when they are available.

3. Shop around -- and keep shopping

It can be a challenge to find a bank that won't make it difficult for, say, a trans person to change the name on their account, never mind one that will give financial support to someone who is transitioning or offer a same-sex couple a discrimination-free mortgage. But if you only take one thing away from this article, it's this: Don't give up.

Over a quarter of the respondents to the LEAF survey said they thought it would be very difficult to find an alternative if they were denied services at a specific bank or financial institution. And a further 18% said they weren't sure where to look for an alternative. That's understandable, particularly if you're already unsure about how to access the financial services you need.

But if you don't have a bank account, it can be costly and leave you vulnerable. For example, you may have to pay high fees to cash checks or fork over for money orders so you can pay bills. If you need to borrow money, you may turn to predatory lenders because you don't feel as if you have other options.

4. Know your rights

It can be scary to open your first checking account, especially if you have been rejected in the past. Try to focus on the benefits of opening an account, such as potentially saving money and building more solid financial foundations. Perhaps you're worried about not meeting the minimum deposit requirements or high bank fees. The good news is that some banks -- particularly online banks -- don't charge monthly fees and don't ask for any minimum deposits.

READ MORE: Check out our list of free checking accounts.

If you do get turned down when you try to open a bank account, you have rights. Start by asking why your application was rejected. It could be discrimination, but there might be a red flag in your banking history or an error in your ChexSystems report. You can then look for ways to fix any issues. If you have had financial issues in the past, look out for what's called a second chance account, which could give you a fresh banking start.

Bottom line

The LEAF study highlights significant economic and financial difficulties faced by LGBTQIA+ people, including discrimination in accessing financial services. The good news is that there are banks and credit unions that increasingly understand LGBTQIA+ issues and are working to offer services to make life easier. There is still a long way to go, but if you don't have a bank account, why not celebrate Pride this year by putting in an application?