As immigration has become one of the most contentious topics in this year's presidential campaign, some credit unions are seeking to make it easier for members to obtain U.S. citizenship.
The latest is $705 million-asset Seattle Metropolitan Credit Union, which recently formed a partnership with the City of Seattle's Office of Immigrant and Refugee Affairs (OIRA) to introduce
The partnership came about following an introduction of the concept by the National Federation of Community Development Credit Unions.
CEO Richard Romero, told Credit Union Journal city officials worked with the Federation on the project and the credit union was invited to join in the conversation. He noted that OIRA and Federation discussed some of the financial challenges immigrants can face when trying to pay for citizenship application fees.
"They process approximately 15,000 applicants through their citizenship workshops on an annual basis," Romero said of OIRA. "Although SMCU now serves all of Washington State, SMCU has been the credit union for City of Seattle employees since 1933, so the partnership is a natural fit."
The credit union's two low-interest citizenship loans, "Citizenship Express" and "Citizenship Plus," are designed to cover costs linked to the citizenship application process, which can range from $700 to $4,000. Only members of the credit union can apply for these loans, but they can live and work anywhere in the state of Washington — not just in Seattle.
The city also provides assistance with forms and translators, Romeroadded, noting that the credit union has also begun the process of translating its own forms into other languages to help members whose first language is not English.
"We have always been the city's credit union, and have always been responsive to our city's evolving community," Romero said in a statement. "It is an honor to offer this opportunity that will make the dreams of American citizenship come true for so many."
These loans have no application fee, no income verification requirements and feature monthly repayments.
The "Citizenship Express" loan product carries a 9.99% annual percentage rate (APR) or 0% interest (with a $40 processing fee). This loan provides funds of up to $700, with terms up to 12 months.
The "Citizenship Plus" loan product features an 11.99% APR or 0% interest (with a processing fee of $13 per $100 borrowed). It provides loan amounts of between $701 and $4,000, with terms up to 24 months.
22,000 Potential Applicants
According to OIRA, there are some 22,000 LPRs in the Seattle region who are eligible for naturalization. Moreover, more than one-half of these people are classified as "low income" and generally cannot afford the $680 application fee to file for citizenship papers. In fact, the Department of Homeland Security's United States Citizenship and Immigration Services (USCIS) is seeking to hike that fee to $725.
Romero cautioned that it is still too early in the process to determine the success of the loan program, but he is optimistic about its future. "The response from groups that provide assistance to immigrant populations has been substantial, so we can only expect that the program will be successful in meeting the needs of Seattle's growing [immigrant] community," he stated.
Nhi Tran, senior grants & contract specialist at OIRA, told Credit Union Journal that next year her agency plans to organize a "mega-workshop" that is expected to attract 1,000 LPRs.
"Because many immigrants work low-paying jobs, support families back at home, and struggle paying the rising costs of living in Seattle, we're partnering with Seattle Metropolitan Credit Union to make sure that people can afford the high cost of the citizenship application of $680. SCMU will be on-site at these workshops to help attendees fill out loan applications and provide financial counseling as appropriate."
Seattle Metropolitan is just the latest credit union to offer the loans.
MariSol Federal Credit Union, a $37 million institution based in Phoenix, Ariz.,
During 2009, said Romano, MariSol FCU merged with a struggling credit union called Chicanos Por La Causa, which already offered citizenship loans. Since that time, MariSol has written more than 200 such loans, including 35 so far this year, in partnership with several non-profits in the community.
Specifically, MariSol FCU has two different loans, the $465 "Deferred Action Loan" and the $680 "Citizenship Loan." Both loans carry 0% interest rates and a 12-month repayment term. The Deferred Action Loan requires a $38.76 monthly payment and a $20 non-refundable application fee, while the Citizenship Loan carries a $56.67 monthly payment and a $30 non-refundable application fee.
Applicants for both loans must also provide proof of income for the prior six months.
Romano noted that these loans are generally used to pay for citizenship application fees.
"If they need additional funds for legal fees, then it is a normal signature loan," she stated. "We [also] require a copy of the citizenship application or the DACA [Deferred Action for Childhood Arrivals] application. This loan is intended to pay for the fees to finalize the process."
Most of the people who seek out these loans from MariSol come from Mexico, Honduras, Guatemala and other parts of Central America. However, Romano noted that MariSol does not help them to complete the application forms. "We do not have that expertise to do that — that is why we partner with agencies [which] do that type of work," she explained.
Neighborly Competition
Seattle Metropolitan has some local competition for its citizenship loans.
Martin Vallen, director of programs and strategic development at Express CU, said they have been offering a citizenship loan since 2010. "We also offer a permanent residency loan [since 2010] and a DACA loan [since 2015]," he explained.
Vallen noted that the impetus for offering these loans came in 2010 when the Washington legislature proposed eliminating funds that supported citizenship/naturalization programs — N-400 application assistance, US civics and English proficiency education — and which included funds that were reserved for those whose fee waivers were denied and this dedicated fund could then assist with the fee.
"With this fund being threatened to be eliminated, we developed the citizenship loan to fill the gap and meet the needs of low-income immigrants and refugees overcome the barrier of affordability to become a U.S. citizen," he said.
The permanent residency loan, he added, was developed to help immigrants overcome the cost barrier of adjusting their status to permanent residents — higher than the cost of citizenship, at $1,070 per application. The citizenship loan provides funding of $680. Both products feature 15% APR and a nine- to 12-month repayment term. Express CU also offers a DACA loan valued at $465, with 0% APR, a $40 application fee and a 10-month repayment term.
The citizenship loan is strictly for legal permanent residents who are eligible to naturalize, while the permanent residency loan is intended for immigrants with documentation who are eligible to apply to adjust their status to permanent residents of the US. The DACA loan allows undocumented children who were brought to the U.S. before reaching their 16th birthday by their parents (and who have met all the conditions set by USCIS) to pay for the application fee to obtain status that protects them from deportation and allows them to legally work.
"There are no fee waivers for immigrants applying to adjust their status to permanent residents," Vallen clarified. "Our DACA loan was developed in partnership with 21Progress, a Seattle-based non-profit focused on building leadership amongst young immigrants. We developed the loan to provide financial assistance to young immigrants they were working with who were eligible to obtain DACA status."
Could Trump Spur More Loans?
Vallen said Express has written more than 100 DACA loans since 2015. Data for the other loans is not available, but Vallen estimates sales were modest since they did not heavily market the products.
He also said that Express will become a part of the City of Seattle's web portal for citizenship and "we will be featured as a financial resource to immigrant and refugee communities in the Seattle/King County area that are eligible to apply for US citizenship."
The Seattle region is one of the most diverse regions in the country, observed Vallen.
"We have immigrants from Mexico and Central America, East Asia, Southeast Asia, and South Asia as well as those from the horn of Africa such as Ethiopia, Eretria, and Somalia, and (immigrants from other regions and countries including) Russia and the Ukraine," he said.
Vallen also noted that Donald Trump's presidential campaign could "possibly" spur heightened interest in these citizenship loans.
"There is certainly a climate of fear amongst immigrant communities with the prospect of Donald Trump as president," he said.
