Magazine article American Banker

Banks Urged to Help Immigrants Cover Citizenship Costs

Magazine article American Banker

Banks Urged to Help Immigrants Cover Citizenship Costs

Article excerpt

Byline: Alan Kline

Banks stand to benefit from immigration reform as newly minted citizens become more comfortable opening accounts, but how far are they are willing to go to smooth their path to citizenship?

A study released Tuesday by the National Council of La Raza found that Latino immigrants who have become U.S. citizens are highly likely to have savings and checking accounts with mainstream banks and credit unions. That's the good news.

The bad news, according to the survey results that were unveiled at a news conference in Washington, is that even many immigrants who are eligible for citizenship will sit idle because they can't afford the application and legal fees, which can easily run into the thousands of dollars. With Congress debating a comprehensive reform bill that could pave the way for millions of illegal aliens to become citizens, consumer activists are challenging banks to consider making loans to immigrants to help them cover their costs.

Elizabeth Garza, the managing director for global consumer banking at Citigroup (NYSE: C), says the bank works with nonprofits to provide micro-loans for citizenship application fees, but it has not considered developing any broader loan programs tied to immigration reform.

Still, she seemed intrigued by the idea. "It is work I can ... go back and prompt my business to think about," Garza said at Tuesday's news conference.

The report from National Council of La Raza, a Latino advocacy group, aimed to examine how mainstream financial institutions are serving legal and illegal immigrants.

In many respects the results, based on surveys and interviews of more than 1,000 Latinos in California, were unsurprising. Though most banks accept individual taxpayer identification numbers or consular cards as identification, many Latinos still lack accounts because they feel intimidated by the account-opening process.

Moreover, even those with accounts are also "routine" users of payday lenders and other alternative financial services. This "suggests that they are smoothing out their monthly income or seeking out transactions that are not provided by their own financial institution," said Janis Bowdler, the director of economic policy at the National Council of La Raza. …

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