Dreamer Loan Programs: The Power of Partnerships with Community Development Credit Unions

by Michael Kavate

Aug 15, 2014
This report provides an overview of five Dreamer Loan programs, identifies their common and distinguishing features, and underscores timely financial empowerment opportunities presented by DACA. In addition to helping individuals afford the DACA application fee, the programs' loan products help largely unbanked immigrants avoid predatory lenders, gain financial knowledge, and begin to establish credit and savings. This report also considers how philanthropy can help replicate such loan programs in various regions of the country. With the prospect of expanded administrative action on the horizon, as well as possible large-scale legalization through future legislation, DACA loans provide an important test-run for the effort that would be required to help upwards of 11 million immigrants along the path to legal status and citizenship, which is likely to include thousands of dollars in fines and fees.
  • Partnerships pay off. Formal partnerships with immigrant-serving organizations, consular offices, and trusted legal service providers help to promote and market available loan programs.
  • Readiness is rewarded. The most successful programs launched on the same day US Customs and Immigration Service (USCIS) began accepting Deferred Action for Childhood Arrivals (DACA) applications.
  • New products are not always necessary. Credit unions can use or adapt existing programs and products to serve would-be DACA applicants who already have an Individual Tax Identification Number (ITIN) or otherwise qualify for a personal loan.
  • Outreach is essential, even when demand is high and resources are limited. Many DACA loan programs feared their funds would be oversubscribed, particularly in areas with high numbers of DACA-eligible immigrants. However, to date, no program has seen applicants overwhelm its funds.
  • Experience with immigrants counts. Credit unions without prior experience serving immigrants face a much steeper learning curve, as they may need to develop both a new financial product like a Dreamer loan program and the capacity and procedures to serve immigrant customers.
  • Clients should be served on their terms. Credit unions often must adjust their business practices to effectively serve immigrant customers. Some successful strategies include offering evening hours, opening mobile branches, and hiring bilingual staff.
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