CUs Keep Distance From Debate Over Immigration Reform
With protests over proposed immigration controls popping up across the country, the financial services industry is keeping an eye on how some of these proposals may affect how they reach out to immigrants.
The issue is of particular importance to credit unions, who pride themselves on serving the underserved, and new immigrants are a growing and profitable niche within the unbanked.
Among the tougher proposals is that of U.S. Rep. James Sensenbrenner (R-WI), which would make it a crime for any person or business to help illegal immigrants enter the country or to help them stay here.
CUNA Manager of Legislative Affairs Katie Herberder noted that the bill doesn't specifically mention financial services providers-but that's part of the problem, since it also doesn't specifically provide a carve-out for such providers, either. "It is very broadly worded, so it could potentially impact any business," she observed. "We are monitoring it, but CUNA is not taking a position on the overall bill and likely won't. We do have a subcommittee looking at this to determine if we need to actively support or actively oppose anything in this bill, but right now it's too soon to tell."
NAFCU similarly suggested that because the issue currently doesn't directly affect credit unions, the trade group is merely keeping an eye on it. Even in states where immigration has always been a major issue, such as Texas and California, the credit union lobby is taking a wait-and-see approach.
"A very important part of our mission is to serve the underserved," noted California CU League's Bob Arnould. "We will certainly review these proposals to see whether this will affect our ability to continue to serve these people, people who need credit unions the most."
But for the moment, Arnould said, there are too many different immigration bills floating around and too few answers about what will actually be passed for the league to know if it needs to take a more active stance on the matter.
"Here in California, we've been though this debate before, back in 1995 and 1996," Arnould added. "That was a battle to deny service to illegals, and that is not what happened. We hope that's how this one ends up as well."
To date, neither the California nor the Texas leagues have heard from any credit unions on these bills, though CUNA noted it had heard from one league that had taken calls from several credit unions on the issue.
The indications, the trade groups suggested, are that credit unions simply continue to go about their business, and there have been no demonstrations outside their doors. The same cannot be said of banks.
Protests At Some Banks
According to The American Banker, an affiliate of The Credit Union Journal, two anti-immigrant groups protested outside a branch of the $1.2-billion Bank Calumet, Hammond, Ind., because it had done business with undocumented immigrants.
That bank was just recently sold to $7.2-Billion First Midwest Bancorp Inc., Itasca, Ill., which has suspended its immigrant loan program "pending clearer legislative and regulatory direction," according to The Banker.
Currently, credit unions offer services to immigrants using the Matricula Consular, for example, as a means of identifying them. They offer these services because of what hasn't been said in the statutes, not what has.
In 1992, NCUA told credit unions that there is nothing in either the Federal Credit Union Act or any of the regulations governing credit unions that prohibit an illegal alien from joining a federal credit union, so long as that person is within the CU's FOM. With that as their backing, credit unions across the country have been catering to the immigrant community more and more aggressively over the last five to 10 years.
Both bank and credit union trade groups are treading carefully on the immigration issue because, at least on the surface, the proposals do not directly affect financial services. And that's the way they'd like to keep it.
"Credit unions should not get involved in this," said Lucy Ito, California CUL's VP-research, communications and public affairs. "Immigration is not a financial services issue."