Identifying and addressing the financial needs of immigrants

The Consumer Financial Protection Bureau is working to identify and address the financial needs of immigrants and their families.

The United States is a nation of immigrants, with more foreign-born residents – over 44 million – than any other country in the world. Though immigrants are extraordinarily diverse as a population, they have some common concerns in the consumer financial marketplace, particularly among low and moderate-income households whose needs are not well met due to a range of systemic barriers that diminish access, fair competition, and transparency. These barriers are particularly salient among the approximately 11 million unauthorized immigrants in the United States, over 60 percent of whom have lived here for over 10 years, as well as among new immigrant populations such as refugees.

For too many immigrants, challenges in consumer finance limit, slow, and frustrate the process of achieving full participation in American life. When immigrant consumers face systemic barriers and harmful practices, they are often unable to take the steps that advance towards home ownership, small business growth, and other wealth creation that ultimately benefit families and communities.

The CFPB has heard from dozens of national, state, and local organizations working to address financial challenges facing foreign-born consumers. Through these recent engagements, stakeholders identified a number of common issues impeding access to fair and affordable financial services and products for members of their communities, including:

• Account access: Stakeholders described that many financial institutions have policies and practices in place that effectively exclude some immigrants from access to banking services and to credit due to immigration status, even among those with prime or near-prime credit scores and other indicia of ability to repay. Stakeholders highlighted the impact of these policies and practices on people who have lived and worked in the United States over the long term, including people with Deferred Action for Childhood Arrivals (DACA), as well as those who use an Individual Taxpayer Identification Number (ITIN) to comply with tax laws. One participant shared her personal story as a DACA recipient whose financial institution refused to extend any line of credit, despite her having a valid Social Security number and work permit through the DACA program.
• Language access: Stakeholders underscored the importance of language access as a way of ensuring fair and competitive access to financial services and products. There are approximately 26 million people in the United States with limited English proficiency, meaning they speak English less than “very well.” Stakeholders emphasized that in-language communication is frequently limited or lacking across different interactions with financial institutions, preventing consumers from accessing services, understanding terms and conditions, and resolving concerns. Organizations also stressed the importance of collecting data on language preference to understanding the various needs of immigrant communities and disaggregating demographic data to identify significant populations of consumers at the local and state level, such as Bengali-speaking consumers in Queens, New York, and Hmong-speaking consumers in Minnesota.
• Vulnerability to predatory actors: With limited or no access to mainstream financial services and products, many immigrants are driven to high-cost or even predatory service providers who charge exorbitant fees or otherwise engage in exploitative practices. Often, these actors target and mislead immigrant consumers with in-language marketing, convenient access, and familiarity with cultural norms, but without adequate disclosure of terms and conditions. For example, stakeholders serving small business owners noted the prevalence of online lenders that promise fast access to credit but at extremely high rates and with onerous terms that may not be apparent or understood. Stakeholders also expressed concern about unfavorable auto loans targeted at low and moderate-income immigrant households.
• Challenges facing refugees and other newcomers: Those who have recently come to the U.S. as refugees or other humanitarian migrants must quickly resettle in a new country and find long-term housing and employment while navigating unfamiliar systems with limited English proficiency. A lack of a credit history can impede the resettlement process. Moreover, many refugees have no prior experience with credit. Humanitarian migrants who have not yet been granted legal protection in the United States may face additional challenges. Stakeholders described how financial missteps in the first years due to systemic barriers to access, as well as a lack of information and resources, can have long-lasting consequences.

In addition to the above, stakeholders shared insight about a range of other harmful practices and emerging issues facing immigrants in their communities, such as the cost of remittances, the impact of medical debt, concerns about privacy, access to higher education, practices in the immigration bail bond industry, the cost of immigration applications, and the impact of low-quality or exploitative immigration service providers. Stakeholders also discussed how a number of factors can make it more difficult for immigrants to assert and enforce their rights as consumers, including immigration status concerns, unstable or informal housing, and a lack of accurate information available to them.

We are committed to using our tools and authorities to support immigrant families in accessing opportunity to build wealth and fully contribute to their communities.

We also welcome further input from immigrant consumers, service providers, community groups, and other stakeholders. If you have an experience to share about financial barriers faced by immigrants, please share your story. And if you have a problem with an auto loan, credit report, credit product, bank account, remittance, other money transfer, debt collection, mortgage, or other consumer financial product, you can submit a complaint online or over the phone at (855) 411-2372. More than 180 languages are available by phone.