An Appeal for Sensible Lending to New Immigrants and Refugees

By Denis Serugendo, MBA

When new immigrants and refugees resettle in the United States of America, they literally begin the new life from scratch, leaving behind almost everything they worked hard for. More important than the material things they left behind, they bring assets like talents, skills, culture, professional backgrounds and hardworking spirits.

One of their main challenges though, is the transition of their talents, skills, and know-how to their new realities; their lack of ability to access capital further complicates the smooth integration of the new immigrants and refugees in their new communities.

New immigrants and refugees represent a positive force to our cities and our neighborhoods; they participate in many different ways in community revitalization, especially when they settle in communities that experienced economic downturn and a shrinking population in recent years. Immigrant and refugee integration—and their success in new society—would mean a thriving and prosperous community for all Americans as well. The banking system can and must play its role in our community in order to help achieve that objective.

The banking system needs to acknowledge the contribution of immigrants and refugees and commit the investment resources which would expand and make easier the access to capital for those who wish to start their own new business, franchises or grow the existing ones.

Historically, and to the extent of violating fair lending regulations, financial institutions hesitate to invest in lower income neighborhoods, predominately those occupied by a majority of African American and refugee populations.

In a recent case, Evans Bank, a relatively small bank operating in the greater Buffalo area settled a lawsuit alleging that it created a map defining its lending area, intentionally excluding the predominately African-American neighborhoods on Buffalo’s east side.

Equal access to capital for all segments of the population is both the right thing to do in order to comply with the federal law, and also savvy business; it creates a win-win-win approach between the banking system, consumers and the communities.

Creating comprehensive financing packages for new immigrants and refugees consistent with their needs and wants also needs to consider their challenges.

Most consumer and business loan approval processes consider many different factors including FICO score, loan collateralization, and co-signer requirement. In some instances, applicants need to supply payment history, the amount owed versus the commitment balance, the length of credit history, credit types, etc. These types of requirements might unintentionally disqualify immigrant and refugee loan applicants, and prevent them from fulfilling their entrepreneurship capabilities, rendering their American dream unreachable.

One idea is to form public-private partnerships to advance the access to capital and expand the reach to all possible investors and focusing further on the most pressing needs and neglected areas of investment.

In Buffalo, also known as the “City of Good Neighbors,” Mayor Byron Brown has already exemplified commanding leadership in this regard by designing the Office of New Americans, led by Jessica M. Lazarin. The City has declared the month of June as Immigrant Heritage Month to recognize and celebrate the positive impact and contributions of the new immigrants and refugees here.

During June, and indeed all year long, banks should seize this opportunity to join the Brown administration’s efforts to further invest in new immigrants and refugees; this in turn will better the communities where they live, raise children and do business.

A united voice from and for new immigrants and refugees would also help their cause. A coming together of smaller, fragments groups—often based on national origin, common language, religion or tribal affiliations—to overcome differences would allow them to agree and to better articulate their shared interests and issues. Especially to work towards solutions to challenges they face in their lives in their new adoptive communities.

Access to capital is a cornerstone of economic mobility for any group—with the above-proposed slate of support, changes in attitudes, and efforts, we can all work towards focusing on and resolving this issue.  K

Denis Serugendo immigrated to the USA from Rwanda in 2000. He is a graduate of Canisius College and Medaille College, where he earned an MBA. He works at the Bank of America.

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