1. NEIGHBORHOOD FUNDERS GROUP CONFERENCE Diverse Voices, Values, and Traditions: Philanthropy in the 21st Century Building Diverse Pathways to the American Dream Presenter: Marva Williams Woodstock Institute September 2005

2. Financial Service Trends of Recent Immigrant

3. The Banked in the U.S. Percentage who have bank accounts Non-Hispanic Whites – 93 percent African-Americans – 63 percent Latinos – 43 percent Mexican Immigrants – 25 percent Source: “Alternative IDs, ITIN Mortgages, and Emerging Latino Markets” Profitwise News and Views Federal Reserve Bank of Chicago, Consumer and Community Affairs Division, March 2005.

4. Use of High Cost Services Operate with cash Check cashers Rent-to-Own stores Payday lenders Pawn shops Mortgage brokers

5. Source: Inter-American Development Bank and Central Banks of Latin American Countries Remittances to Latin America 200120022003 $U.S. Million $26,012 $33,822 $40,288 Percent Increase 30%19% Remittances

6. Built on Trust Use Informal Savings and Credit Networks Tandas: Mexican-American form of rotating credit Essos: Haitian-Americans contribute the same amount every week-- the full sum is given to one member until everyone has received a payment

7. Challenges to Financial Mainstream Language Lack of documentation Unreliable banking system in country of origin Lack of knowledge Finding a trustworthy advisor

8. Opportunities to Enable Immigrants to Engage in Financial Mainstream

9. Non-Profit and Community Organizations Financial literacy training Advocate for new bank products and services CDFI products and services Banking regulations

10. Changes in Documentation ITIN: IRS Individual Tax Identification Numbers Mexican Consular Matricula Card

11. New Alliance Task Force Launched in Chicago in May 2003 by the Chicago regional FDIC Community Affairs Program and the Consulate General of Mexico Participants: Federal Regulators, Mexican Consulate, Banks, Community-based Organizations, Secondary Market, and Private Mortgage Insurance (PMI) Companies Impact: Financial Education, Bank Products & Services, and Mortgage Products

12. New Products and Services Dual ATM cards or stored value cards offered by banks offer the lowest costs encouraged the use of mainstream financial products among Latino immigrants and family members in home countries Alternative banking products Alternative credit scoring Source: “Alternative IDs, ITIN Mortgages, and Emerging Latino Markets” Profitwise News and Views, Federal Reserve Bank of Chicago, Consumer and Community Affairs Division, March 2005.

13. Increased Competition Free checking and other incentives respond to the competitive marketplace More bank branches in many markets, including low- and moderate-income communities

14. Market Potential Sources: Brookings Institution, October 2004 and Michael Frias, FDIC 2004. Hispanic purchasing power $653 million in 2003 Asian purchasing power $344 billion in 2003 Hispanic buying power in the U.S. will jump 89 percent between 2000 and 2007, from $491 billion to $926 billion

15. Evidence of Financial Sustainability Study of CRA Products A majority of surveyed institutions engaged in some lending that they would not have done in the absence of CRA A vast majority of institutions responding to the CRA reported that they were able to do so profitably Marginal CRA-related lending tended to be small Source: Avery, R, R. Bostic, & G. Canner. “Assessing the Necessity and Efficiency of the Community Reinvestment Act”, Housing Policy Debate, Fannie Mae Foundation, 2005.

16. Recommendations Financial literacy training Consumer protections Savings incentives Marketing outreach: multi-lingual advertising, materials and staff Trust: partner with immigrant and community- based organizations Products need to be place and immigrant group specific Remember basics: social security policy

17. Role of Foundations 1) Support education, counseling, advocacy, and policy development 2) Evaluation of programs 3) Development of best practices 4) Deposits in CDCUs & Community Development Banks 5) Support efforts in new gateway communities