New Immigrants Face Unique Financial Challenges

Are non-English-speaking consumers at a disadvantage when it comes to conducting their financial affairs?

That’s the question the Government Accountability Office (GAO) is asking credit unions and other financial service providers as a result of the Credit Card Accountability, Responsibility, and Disclosure Act. Congress wants to know if language barriers could be a problem for new immigrants, so the GAO has been asking around.

Is it hard to understand financial literacy concepts and to conduct business in this country if you’re not a native speaker?

Hello.

This is where you can almost hear the thought bubbles in people’s minds: Is the Pope Catholic? Will the Republicans blame the Democrats for every problem in the country, and vice versa? Is the government in debt?

Call me a cynic, but I have to say, yes, it would be hard to understand the ins and outs of managing one’s money in this country if you didn’t speak English. In fact, one could say it’s just as hard as it is for regulators to keep track of derivatives and mortgage-backed securities.

So when the GAO wanted to talk to some credit union people about the issue, CUNA put the agency in touch with folks like Leo MacNeil of HarborOne Credit Union, Brockton, Mass.; Don Cohen, Landmark Credit Union, New Berlin, Wis.; Melissa Marquez, Genesee Co-op Federal Credit Union, Rochester, N.Y.; Megan Weatherby, Syracuse (N.Y.) Cooperative Federal Credit Union; and Ivone Silva, Luso-American Credit Union, Peabody, Mass.

Each of these credit union people works with new immigrants. They know their struggles firsthand. And while they all agreed that language is a critical issue, it didn’t always top the list of immigrant issues.

Unique challenges

In no particular order, these are the some of the problems new immigrants face in understanding financial matters in this country:

• Peer experience. Not unlike us, new immigrants tend to listen to their peers, even some who don’t necessarily have their well-being at heart. Overcoming peer influence can be difficult. By nature, we tend to trust people who are like us.
• Culture. Many immigrants come from countries where there’s no trust of either the government or of the banking system. The idea of putting their hard-earned wages anywhere but in their own personal hiding place is, well, foreign.
• Socio/economic background. Among middle- and upper-income immigrant groups, language seems to be less of an issue. That’s not to say they’re more capable, but they often have more experience back home that translates well to their new surroundings.
• Education. Better-educated immigrants tend to adapt more quickly to their new environment and are able to assimilate economic concepts more easily.
• Complexity. Our financial systems are complex. Just think how complex it must seem to a new immigrant wanting to buy a house in this country with fixed- and adjustable-rate mortgages, loan-to-value calculations, credit scores and credit histories, principal, interest, taxes, and insurance.
• Language. For several respondents, language is the second-most critical challenge. Participants sometimes ranked culture or education ahead of language as the key challenge.

HarborOne Credit Union regularly teaches ESL (English as a second language) courses to its members and has a waiting list of 2,000 people. But the credit union knows the issues are much bigger than language, which is why it created a multi-cultural center to help new immigrants with language, job skills, and job hunting, along with personal finance. The need to have a job is the top priority, even before learning about money management.

Within Wisconsin’s Hmong population, the issue is culture more than language. When this immigrant population feels more trusting and comfortable, it becomes willing to investigate how to conduct financial business. They come from a cash-oriented society, so they’re wary of credit.

And in some communities, many immigrants have been abused more by car loans than by mortgages. To overcome this history it’s essential to build a relationship with members of immigrant communities and to establish trust.

“It is a frightening experience to not know what is being said about you,” noted one participant. “And with all the paperwork and documentation for a transaction written in English, it’s just plain complicated. A lot of older immigrants struggle just to sign their names.”

One participant said education was key because new immigrants tend to rely on peers who speak their language, even if those peers are scoundrels.

What will come of the GAO study? The agency will report back to Congress, which will decide whether to mandate translations from English to the languages of new immigrants, a costly proposition if it does happen.

That said, some credit unions are already taking advantage of the new Spanish language consumer Web site from CUNA, El Poder es Tuyo, that will help educate the largest immigrant population about personal finance.

JAMES HANSON is vice president of business to consumer publishing for the Credit Union National Association. Contact him at 608-231-4080.