Citizenship Promotes Financial Engagement in the Latino Community

Recent data on our economic recovery show that American families are struggling to gain financial stability amidst stagnant wages and high levels of poverty.  In fact, one in four Latinos and one in six Americans overall were counted as poor in the Census’s latest national poverty report.

Clearly, households need affordable financial tools to help them make the most of what they are earning.  Unfortunately, Latinos account for many of the “unbanked” in the U.S., meaning they are less likely to have a savings or checking account at a bank or credit union.  The outlook is bleaker for Latinos who are non-U.S. citizens, or for whom English is not their primary language. While there are a number of alternative financial services and products that people without bank accounts often use, bank account ownership is widely recognized as a fundamental step in achieving financial security. 

NCLR conducted a survey in 2012 of Latinos in California to see who was banking the Latino community in the state.  We wanted to know what financial product they used to pay for daily expenses, such as lunch or groceries, as well as how they paid their monthly bills and if they were able to save after their expenses had been paid.  We also asked Latinos what services offered by financial institutions they found to be the most helpful and if they were comfortable using online and mobile technology in their banking.

Our full detailed findings can be found in our report, Latino Financial Access and Inclusion in California.  When the report was released in Washington, DC, NCLR President and CEO Janet Murguía discussed one of our key findings:  citizenship status was a factor in how engaged Latinos were with the financial mainstream.  The non-U.S. citizens who participated in the survey had lower levels of bank account ownership, similar to national statistics; accessed credit at lower levels; and reported a drop in savings the longer they lived in the U.S. without naturalizing.  In contrast, immigrants who had become U.S. citizens showed high levels of engagement with the financial mainstream, even owning bank accounts at rates higher than U.S.-born citizens.

What these findings tell us is that for Latinos, citizenship truly is one of the most important assets an individual can have.  Across communities, financial institutions, nonprofits and advocates, and policy experts have formed partnerships to help promote the financial inclusion of immigrants through naturalization.  The citizenship process can help to increase the financial engagement of immigrants in the financial mainstream.  The development of safe and affordable financial tools and solid financial information, designed to help people afford citizenship, are an effective means of fostering long-term positive financial habits.

Citizenship opens up numerous opportunities for immigrants, but it will take the participation of many to make sure this opportunity is available to the millions who could benefit.  That is why NCLR is working with the financial industry, immigration advocates, and financial access policy experts, as well as policymakers.  Together, we’ll help make citizenship a reality for all who want it.