New immigrants have a great deal to gain from using the U.S. banking system and so do local communities and businesses.
Local efforts to help immigrants save and become financially literate promote stable neighborhoods and contribute to the economic vitality of the community. In Rogers, Ark., financial literacy programs not only created a wider customer base for local banks, but ensured that immigrant employees at the local poultry processing plants were more likely to settle permanently in the town, ensuring the plants kept a stable workforce.
There are several obstacles that lead many immigrants to avoid banks—language barriers, lack of banking experience, distrust of banks. As a result, many immigrants choose to pay excessive fees for check cashing and money transfer services thereby routinely becoming targets for thieves due to large amounts of cash kept at home.
Cities that want to develop financial literacy programs for immigrants face some challenges, such as overcoming language and cultural barriers to reach sometimes insular communities. The good news is that there are many guides and established programs that offer great ideas for building a program from scratch. Community-based organizations (CBOs), immigrant service providers and local banks can offer insight and advise cities on creating appropriate curricula. There are also many free resources available to help get started. Appleseed offers several guides and reports on the topic and the FDIC provides instructional materials in seven languages at no cost.
Another option cities might consider is tailoring an existing financial literacy program to reach immigrant communities. Many cities already operate financial literacy workshops for youth or low-income residents. Immigrants can be encouraged to participate in these programs and, again, working with CBOs and immigrant service providers is a great way to develop a plan to reach this audience.
NLC’s recent Municipal Action Guide Financial Literacy Programs for Immigrants includes more information about the importance of “banking the unbanked” and details about existing programs.