No SSN? No problem, says an increasing number of CDFIs and other mission-driven lenders.
By Bianca Gonzalez
Citizenship status, language barriers and a lack of documentation are just some of the many factors that lead new Americans and undocumented residents to go unbanked. As mission-driven financial institutions, however, CDFIs and CDCUs are uniquely suited to overcome these barriers.
This is particularly true of credit unions with the Juntos Avanzamos designation, which requires lenders to meet standards including having a bilingual staff and accepting alternative forms of ID, such as I-TIN numbers, in place of social security numbers.
Mary Navarrete is the director of community impact at the CDFI Point West Credit Union, a Juntos Avanzamos-designated CDCU serving the Portland metro area. Next City spoke with Navarrete on overcoming barriers to lending access for non-citizens and undocumented residents.
How do language barriers and legal concerns affect banking access for the undocumented and noncitizens?
It impacts not only not understanding what words mean, but also what's behind those words. They also have to be careful what they sign up for because they don't want to have any type of repercussions because of their status. Not only are they afraid because they don't understand the language, they're also afraid of losing everything they have worked for throughout their years of being in this country.
You want to do as much as you can for your community and your people. But you also have to be careful because you don't want to harm them by trying to do something good for them at that moment. Throughout my years, I've learned to stop and understand whether I'm actually giving them the best advice I can or if I need to reach out to other community partners.
We have worked with the Consulate of Mexico for several years now. If I need to reach out to them and talk to somebody that is licensed specifically, I reach out to them and pass on the information or resources.
What are some unique issues you address when working in finance with the immigrant community?
I was in Bend, Oregon, and I did an educational class specifically for the ITIN community. So I talked about how to build credit with an ITIN, how to protect your ITIN, and what not to do with your ITIN.
It's the educational piece and letting them know that credit is everything in this country. We come from different parts of the world, where maybe in our own country credit is not a big deal or maybe doesn't even exist. Here, credit is really part of your DNA. It says everything about a person.
We also talk about beneficiaries in different classes. There's a lot of times in my community where someone doesn't have a beneficiary. Sometimes they don't even have a secondary person in their account. They may either get deported, or they kind of disappear. So it's really important for us to ask, “What's your plan? Let's talk about all the information that you need to know and have a plan ready in case anything happens."
What challenges with documentation account opening do noncitizens and immigrants face?
Point West really started their focus in the immigrant community when they merged with a credit union that specifically served just immigrants back in 2005.
We promised we would always have bilingual staff. We would all be always committed and present in our immigrant community, and therefore we were the first credit unions in the Pacific Northwest to provide ITIN loans. Now over eight credit unions in the Pacific Northwest, if not more, are doing noncitizen lending ITN loans. Do I believe all the programs are fair? No, but I'm grateful that my community has options.
With other institutions, they are providing higher interest rates for our community that has an ITIN. They're taking advantage of their situation.
A lot of times they justify it by saying they're high-risk loans, and I ask "can you please tell me more of why they are high-risk?" They're providing income. They're providing information on their taxes and they're providing a credit score.
I love talking about our numbers and sharing as much information as we can about the successes and challenges of our members. I'm always proud to say that our delinquency for ITINs is very minimal.
What opportunity can banking access for immigrant communities bring?
I strongly believe that the only way we can eliminate poverty in this world, not just the U.S., is by providing financial education. A lot of us make a lot of financial mistakes at a very young age because we weren't taught any different.
The only way we can eliminate poverty is by providing financial intermediation. We need to provide them with the tools for them to make their own choices. When they have those tools in hand, they'll be able to take their journey in life.
This story is part of our series, CDFI Futures, which explores the community development finance industry through the lenses of equity, public policy and inclusive community development. The series is developed in partnership with Next City.