Credit Unions Are a Place of Opportunity for Immigrants
By Amy Nelson, CEO, Point West Credit Union
In recent months, the viability of lending to immigrants has been called into question across the financial services industry. In response, credit union movement leaders, such as the National Federation of Community Development Credit Unions, have responded to this concern, sharing insight, data and trends that dispel this perceived risk and highlight the opportunities that exist in helping non-citizens thrive economically. As a credit union steeped in helping our immigrant members since 2004 when Point West Credit Union in Portland, Ore., merged in Hacienda Credit Union, we can tell you – those credit union leaders are absolutely right.
First, here’s the data: As of Dec. 31, 2016, Point West’s non-citizen portfolio stood at $8.8 million, with a 0% delinquency ratio (yes, really – ZERO) and a 0.4% point one-year charge-off ratio. Compare this to our total loan portfolio of $80.5 million, which posted 25 basis points of delinquency and 35 basis points for charge-offs – nearly indiscernible from a risk perspective. Not only have we provided much-needed capital for marginalized community members to thrive, but they in turn have been proven to be fiscally responsible and engaged members of our cooperative. And for those who say “the majority of your quoted numbers pre-date Inauguration Day,” well, so too did immigration enforcement.
Before we dive into the valuable opportunity we as credit unions can and should provide our immigrant communities, let’s talk perception versus reality. Twenty-four-hour media outlets provide continuous coverage of the current administration’s immigration policies and rhetoric. This never-ending stream of news stories, whispers, rumors and increasingly, falsehoods, has created fear and uncertainty within our community. Our employees, members and community partners hear daily, “What if the administration implements a travel ban? A wall? Wants my member information? Takes my money? Takes my family member?”
If anything, the current policy climate is an opportunity for credit unions to educate members on their policies and practices that benefit a member’s financial security – and show that their financial security has no borders in our electronic banking world. Member data is safe, and member money is safest and accessible in a credit union account, not under a mattress where it could be confiscated, or worse, fall prey to scammers who are capitalizing on the administration’s actions and immigrants’ fears. Additionally, it positions credit unions as trusted community partners when an immigrant needs additional legal, health and/or human services. Credit unions have long-standing and strong community partnerships – they should leverage them. What we are seeing is not the “Aren’t non-citizens a flight risk?” scenario people often first ask us about; rather we are experiencing a heightened level of fear, uncertainty and desire for assistance as these responsible community members work to get their finances in order and ensure their family’s safety.
From an operational perspective, serving non-citizens is legal within our regulatory framework and deeply embedded in the Equal Credit Opportunity Act. It is our responsibility to follow the letter of the law in Fair Lending and our mission to serve the underserved. What clearer road map exists than the robust and intertwined guidance we receive from the NCUA and our cooperative roots? In this regard, our regulatory framework frees us as credit unions to fulfill our mission to serve ALL of our eligible members – immigrants included.
Sometimes, simply, the barrier to opportunity is knowledge. If you are a credit union that wants to serve a marginalized population that has every right to access your products and services (remember, National Origin is prohibited from consideration in lending program parameters, access and decisioning), take that next step!
A great place to start is to understand your member identification program and who you may be unintentionally excluding: “Undocumented” does not necessarily mean an immigrant does not have the legal documentation to successfully undertake a relationship with a credit union and access much-needed capital to boost their family’s financial capabilities. On the contrary, do we as credit unions have a robust member identification program that includes forms of identification immigrants have readily available? The NCUA website provides guidance for naming the following forms of identification: Individual Tax Identification Number; Passport number and country of issuance; Alien identification card number; or number and country of issuance of any other unexpired government-issued document evidencing nationality or residence and bearing a photograph or similar safeguard. The Consular Matricula card is a specific example Point West utilizes for standard ID with our members.
Ultimately, credit unions can and should be a place of opportunity for immigrants. Shortly after Election Day, Point West released a microsite at the Community Credit Union Conference sponsored by CUNA and the Federation. The site, citizensofpointwest.com, outlines our Declaration of Beliefs. It clearly states the underpinnings of who we serve and why we serve them. Our products and services are really no different than yours but we’ve differentiated our purpose, which ultimately lights the way for Point West to be a point of opportunity for non-citizens and other marginalized community members. This is priceless in terms of creating market niche, relevancy and member loyalty.
Serving immigrants is a robust, thriving, strategic mission that continues to evolve at Point West. As with ALL strategic plans, we analyze, implement, test and re-analyze. The cycle continues to produce positive results, and we continue to broaden our scope, which provides access to a thriving community of citizens and non-citizens alike. Join us.