Name changes can create financial chaos for transgender Americans

Changing your name can be an important step that a transgender or non-binary person takes to embrace their identity.

But this is rarely easy and can create even more problems, especially for your finances, after the fact, according to a recent white paper published by JP Morgan Wealth Management. Even if you manage to go through a long and complicated process to legally change your name, there are often other obstacles to overcome.

“You have a new name that doesn’t match your driver’s license, or the name on your lease for your apartment, or the name on your credit cards. So it becomes a problem when these (financial) institutions think that we’re fraudulent,” Leo Aquino, a personal finance journalist and educator who founded Queer and Trans Wealth, told CNBC Make It. “You’re automatically sort of seen as…someone who’s trying to take over us, which is just not true.” »

Trans and non-binary people may face additional challenges compared to those who change their name for other reasons.

“There are clear processes for updating a last name change due to marriage or divorce – our legal system is designed to support these changes,” Shelby Anderson told CNBC Make It. executive director of wealth planning and advice at JP Morgan Wealth Management. “But the United States has been slow to develop (policies) to address other changes, like (gender) identity and first names.”

Trans Americans are already more likely than their cisgender peers to face financial challenges like unemployment and homelessness. But even those who are otherwise doing well financially can run into major problems simply by changing their name.

Anyone trying to open a new bank account or apply for a credit card whose name does not match the name on their official ID will face difficulties. But for trans people, getting both government-issued documents and financial documents, like a credit report, matching their chosen names can be an overwhelming, if not impossible, process.

“Due to the complexity and cost of the procedures, hundreds of thousands of transgender people in the United States do not have a single official ID…that correctly identifies their gender identity or name. chosen”, according to the JP Morgan white paper. These documents may include a birth certificate, passport, driver’s license or social security card.

Inaccurate credit reports are part of the reason finances can be complicated for trans people after a name change. Credit reports using dead names – old names that individuals no longer use – are common and can lead to credit discrimination against trans people, says JP Morgan.

When a person changes their first, last or last name, they must contact all three credit bureaus – Equifax, TransUnion and Experian – to report the change and follow each agency’s individual process. Since agencies have more experience and have established policies regarding marriage-related name changes, these tend to go more smoothly.

But changing your name due to a gender transition can end up giving you a whole new credit history, according to Experian.

Aquino, who has gone through the name change process himself, says it’s up to the trans or non-binary person to make sure their credit history tracks them accurately. He ran into problems when he applied for a lease for an apartment shortly after his legal name change because his credit history hadn’t fully transferred, he says.

“(Right off the bat) they say, ‘We don’t know you, you don’t have a credit history,’ and ‘How can we prove that you are someone who has been able to pay their rent consistently ‘time, if it’s under a different name?'” he says. “The solution (for) most of us is that we have to be very organized, more on top of things, which is not really a solution.”

Getting approved to rent an apartment is just one of the problems that can arise from inaccuracies in your credit report. Potential employers, utilities, phone companies and others may pull your credit report as part of a background check in order to hire you or establish services at your home.

“Having to give up your name to get this information can feel like an invasion of privacy,” Anderson says. “It can feel like you’re sharing information that can be traumatic for the person who is forced to share it, that’s the broader issue.”

“It takes a lot of courage to undertake the renaming process, and it’s such a victory when it happens at the courthouse,” Aquino said. “Having all these institutions doubting at every step of who you are, it (can be) really discouraging and really heartbreaking, depending on where you are in your process.”

Instead of standard procedures and guidelines for financial institutions and government agencies to support first name changes, trans and non-binary people updating their names can take a few steps to make the process as smooth as possible .

1. Stay organized

As Aquino points out, it’s necessary for trans and non-binary people to carefully track their financial accounts before and after a legal name change. Ensuring that every account you have opened or closed is accurately reflected in your updated credit report is essential to avoiding problems with lenders in the future.

Aquino also recommends taking notes on all your calls with creditors to keep tabs on where you are in the process of updating your records and keep your emotions in check.

“When you get these kinds of phone calls, things can get very emotional and emotional very quickly, to the point where you forget a lot of important details about what you’re supposed to do next,” he says. “What’s been really helpful for me and my clients is just separating the facts from the emotions.”

2. Use your passport

Even if you are legally able to change your name, a gender marker on your government-issued ID may still be incorrect and, in some cases, difficult or impossible to change.

“Many states require a complete invasion of privacy (requiring public disclosure of proof of surgery or other medical interventions) to correct identity documents – interventions that are often financially impossible to obtain or even unwanted by the transgender person,” reports JP Morgan.

The US Department of State, however, allows individuals to change the gender marker on their passport without a medical certificate. This allows trans and non-binary Americans to obtain an accurate government-issued ID after changing their name relatively simply.

3. Find help

Unfortunately, trans and non-binary people still face insurmountable discrimination from potential employers, landlords, financial institutions, and more.

Finding peers who have been through the name change process is essential to guide and support you along your journey. Additionally, it’s a good idea to research the organizations you want to work with, such as employers and property managers, to make sure they have a track record of treating trans and LGBTQ people with fairness and respect.

“Once a trans person gains financial security, you better believe we’re putting it out there,” Aquino says. “We take care of each other, we borrow from each other’s businesses, we support each other when things are tough. (There are) various reasons why we should be allowed to thrive, but most importantly, we deserve it. We let’s give it back to our communities.

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