Bringing Legal Immigrants into the Mainstream
Brookings Institution:
One piece of the Senate bill proposes that illegal immigrants who adjust their legal status pay back taxes and other fees.
Echoing the debate raging in the halls of Congress, the public debate is centered on what to do about the large group of immigrants living here illegally---currently estimated to be about 30% of all foreign-born residents.
Making it easier for immigrants to use mainstream financial institutions such as banks and credit unions is a step in the right direction.
Studies show that broad financial access is one important indicator of a thriving community; income, homeownership, and employment are higher, and crime rates are lower, in metropolitan areas where a greater proportion of the population has a bank account.
However, immigrants are less likely to have checking or savings accounts and less likely to own a home or invest in the stock market than those born here.
That is because many immigrants arrive with little or no banking experience, as a result of weak political, legal, and economic institutions in their countries of origin that discourage ordinary citizens from saving and investing.
As the immigrant population continues to grow, there are many more opportunities to link them to the mainstream financial system, so that they can better contribute to a healthy U.S. economy.
Helping a small number of immigrants open an account in one of these neighborhoods can have a high payoff by increasing the chance that others will learn about the benefits of banking from a trusted source, an immigrant neighbor.
The high rate of immigrants' participation in the labor force presents an opportunity for employers to partner with financial institutions to provide financial education and access to banking services.
By partnering with schools to open student-run branches in high schools, banks can make progress in reaching potential customers, while providing education to the next generation of Americans.
