BROCKTON, Mass. — HarborOne Credit Union learned over the years that reaching out to newly arrived immigrants and marketing products to them is a long, slow process that involves building relationships of trust.
The $1.4-billion CU located just south of Boston put that concept into practice recently when it rolled out its new citizenship loan program, called the New Americans Loan Program.
The loan was established to help offset the $675 fee that immigrants must pay in order to take the U.S. citizenship test.
HarborOne officials were already partnering with The Cape Verde Association, South Shore Haitians United for Progress, and the Association of St. Martin to offer financial literacy classes and other resources to combat predatory lending to the city's large population of Cape Verdean, Haitian and Latino immigrants.
As Credit Union Journal reported June 10, 2007, the credit union established a MultiCultural Banking Center in a vacant downtown branch that became a de facto think tank where students and employees could exchange ideas on how to better serve their communities. It was out of that that HOCU developed the idea for the loan program.
HarborOne's program follows the introduction of a similar loan by North Side Community FCU, Chicago, which has joined forces with Centro Romero, a community-based organization that serves the refugee immigrant population on the northeast side of Chicago.
"It almost came by accident because we were struggling to find ways to reach out to help the ethnic community," HarborOne SVP-Marketing Leo MacNeil said. "Then we heard about a loan program that North Side FCU was doing and decided to contact them."
North Side Community FCU and HarborOne's both work the same way. The potential borrower is screened by local organizations that serve the immigrant population in the area. Once it is determined that the borrower is eligible to take the citizenship test, he or she is referred to the credit union and applies for the loan.
Loan underwriting standards are very liberal and there is no application fee. The interest rate for the New Americans Loan is similar to a standard signature loan, currently 9.9%. The borrower has 12 months to pay the loan off.
MacNeil said that the credit union has already contracted with foreign language media outlets in the area to start promoting the loan. Plans call for using an infomercial format to communicate the details of the loan program.
"Our employees who speak those languages also appear in our ads." MacNeil said. "We believe it's the most efficient way if employees speak the same language."
Although North Side's loan program is gaining visibility, with 60 loans written totaling $30,000, HarborOne's program is just being rolled out and to date, few loans have been written.
In addition, some local immigration advocates are skeptical about the efficacy of the loan program.
"I think overall, the federal government is erecting a second wall to citizenship by raising the test fee from $400 to $675 this past summer," Massachusetts Immigrant and Refugee Advocacy Coalition Executive Director Ali Noorani said. "I think it's great that there is loan assistance, but our concern is that the terms of the loan appear steep."
On the other hand, Noorani said, there are no other programs available to meet the financial challenges of paying for the test. "Ideally, more financial institutions will make these loans available and start competing to reduce the interest rates."
The actual loan payoff amount is $720, according to MacNeil.
"We don't have any credit unions asking about our model, but that's not to say they won't in the future," MacNeil said.
(c) 2008
