Since the 2012 elections, discussion of U.S. immigration policy reform has ramped up significantly.
Much of the conversation is driven by different proposals regarding the “path to citizenship,” which would establish an attainable process for transitioning undocumented immigrants to documented U.S. residents and citizens.
In late June, the U.S. Senate passed a comprehensive—albeit controversial—immigration reform bill. Whether the House follows suit remains to be seen, but the Senate move is viewed as historic and somewhat of a victory for those rooting for reform.
With an estimated 11 million undocumented immigrants currently living and working in the U.S., credit union leaders who think strategically about membership growth can’t afford to ignore the important step many Americans are pushing their legislators to take.
Credit unions, like many American businesses and organizations, stand to benefit tremendously from an attainable path to citizenship. In the most basic sense, credit unions will find a completely new market for lending products.
The process of obtaining U.S. residency and then citizenship is likely to remain long and costly, and prospective members will be looking for ways to fund the many stages of the immigration naturalization process.
As a Mexican immigrant, I remember going through an arduous and expensive immigration and naturalization process with my family when I was around 10 years old.
While the result was overwhelmingly happy, the steps to get there weren’t always pleasant. As the first one in my family to learn English, I had been my parents’ trusted interpreter and advisor on everything from registering my siblings for school to calling our local telephone company to dispute extra charges on our bill.
In addition to extensive paperwork, my family had to travel to the local immigration office frequently, which created its own financial hardship. My parents saved money from their paychecks every week or borrowed from family or a circle of friends through a “tanda,” an informal savings and borrowing network common in immigrant communities.
Today, the filing fee for the application to naturalization through the U.S. Citizenship and Immigration Service has reached $680 per person, and families often have several individuals going through the process at once.
But this can be the least of the all the necessary expenses, which may include filing fees for temporary residence, permanent residency, or legal fees. In fact, some families pay upwards of $10,000 when all is said and done for just one individual to adjust his or her immigration status.
Some credit unions have acted on this need, repackaging their existing consumer loans to help individuals pay for these immigration expenses. Other credit unions also go above and beyond, connecting the community with immigration attorneys, legal clinics, interpreters, and other local service providers to make this process easier.
The need for this will only increase with immigration reform.
The larger benefit, however, is the ability to introduce an entirely new segment of the American consumer market—no longer hindered by the lack of traditional identification and documentation—to the credit union difference.
For many immigrants, particularly Mexican immigrants (who represent 60% of the nation’s 11 million undocumented immigrants), traditional financial institutions may represent something entirely different than they do to most Americans.
Whereas U.S.-born consumers may not think twice about using traditional financial institutions to save and borrow, a Hispanic immigrant may not think this is even an option. With check-cashers, money order providers, and friends or family fronting loans, credit unions and banks often are not even considered by Hispanic immigrants.
Several factors prevent many Hispanic immigrants from using traditional financial institutions, including the fear of rejection due to a lack of credit, the lack of a welcoming environment, and a perception of higher fees or hoops to run through. Credit unions can change this.
A critical first step is establishing trust. Credit unions must work within their local communities now to begin to build the relationships that will grow over time. Credit unions already working with Hispanic communities certainly have a leg up.
One of the best hands-on ways to start is with culturally relevant financial education that takes into account how Hispanic immigrants handle their money today and shows them better alternatives that help them achieve financial success.
If my parents had been able to engage with credit unions earlier, we could have prevented a lot of frustration and worry. Not only would our concerns about immigration expenses have been alleviated, we also would have received guidance on dealing with other financial emergencies that often came up when I was a child—car breakdowns, emergency medical visits, or requests from relatives in Mexico who had emergencies of their own.
Like many Hispanic families, we are very loyal to those who help us during times of need; those who respect us and are welcoming. From this perspective, an earlier relationship with a credit union would have been a win-win for our family and the cooperative, which we likely would have recommended to friends and family.
Grassroots community initiatives, like culturally relevant financial education and outreach, often yield a higher return than extensive media campaigns.
This is particularly true for credit unions looking to serve immigrant families who are not only going through the immigration and naturalization process, but who are simply going through the stages of life that require a sound financial partner.
It’s this kind of outreach that ultimately allows credit unions to plant the seeds of trust that grow into loyal, life-long memberships.