It’s no secret that the Trump Administration has a deeply anti-immigrant agenda. What may be surprising is the expect to which they have been almost cruelly innovative in finding ways to make the American Dream prohibitively expensive, even for immigrants with legal avenues to pursue it. For example, the public charge rule, which went into effect last month, allows for the denial of a green card if the applicant is determined to be likely to end up relying on public benefits. The impact is chilling, as noncitizens are needlessly dropping their public benefits out of fear of immigration consequences.
Another tactic has been to increase application fees. According to the Federal Register, in November the administration proposed to increase the cost of appealing a deportation order from the current rate of $110 to $975. They are also seeking to raise the price of becoming a permanent resident from $990 to $2,750, and to increase the cost of naturalization (citizenship) from $445 to $1,170. Although administration officials claim the changes are meant to adjust for inflation since the last increase in 1986, the Wall Street Journal found that, were this the case, the price-hike would be 130 percent, not the proposed 800 percent.
No, the goal is, again, to harm immigrants and their families. But why are the proposed fees such a barrier to non-citizens? For one, filing fees are not the only expense: immigrants must also pay for a lawyer, paperwork, biometrics and travel. All-told, these costs can easily exceed $10,000. Moreover, immigrants, especially asylum-seekers and the so-called “Dreamers,” live on the lowest rungs of the economic ladder. According to Pew Research Center, the median annual personal earnings for immigrants is nearly half that of the overall population. At the same time, for reasons of being low-income, low-English-proficient, and having no-or-poor credit, this population is also the least likely to be approved for loans from mainstream lenders.
This last point has two significant ramifications. First, many immigrants turn to both legal and illegal predatory loan companies to pay these fees: loan sharks, payday lenders, pawn shops, auto-title lenders, and others, most of which charge triple-digit interest rates. This, in turn, forces the borrower to decide between making an interest payment and putting food on the table. Or second, they do not pursue an adjustment of their immigration status, resulting in their being vulnerable to deportation and unable to realize myriad benefits of citizenship or legal permanent residency.
This is why Capital Good Fund offers immigration loans of $300 – $20,000 for all manner of immigration-related expenses: filing and attorney’s fees for applying for citizenship or green card; seeking asylum; filing a family petition; or deportation defense. With a repayment rate of over 96 percent on $1.3 million financed, we have shown that immigration loans are an economically viable product. And not only are they transformational for the borrower, they have a tremendous impact on the broader economy. The Center on Budget and Policy Priorities, a nonpartisan research and policy institute, and the George W. Bush Institute, have shown that immigrants start businesses, create jobs, and pay taxes. This is therefore an issue of both social justice and economic growth.
While a handful of other lenders, including Self-Help Credit Union and Mission Asset Fund, offer similar products, we cannot meet the demand for these loans alone. Pew estimates that well over one million legal permanent residents do not apply for citizenship because of cost, and there is a $500 million need for funds to pay for immigration bonds. With millions more eligible for a green card, relief from deportation, and other adjustments-of-status, the overall market opportunity is in the billions of dollars.
Under this administration, immigrants are under attack and living in fear. Loans are not the only solution, to be sure, but they can make a huge difference. Nonprofit lenders, credit unions, and smaller banks can and should give immigrants access to the American Dream through the provision of equitable credit.
Andy Posner is the Founder and CEO of Capital Good Fund, a Rhode Island-based nonprofit aimed at ending poverty by providing equitable loans to low income people to meet a number of financial challenges without having to turn to predatory lenders.