NYC Study Looks at Immigrant Banking Habits
NEW YORK—A study of members of some of New York City’s fastest-growing immigrant communities finds that their banking patterns can be very different, with some immigrants opening bank accounts by the time they’ve been here a few years and others still not having them after living here more than a decade.
The survey by the city’s Department of Consumer Affairs looked at the Chinese, Ecuadorian and Mexican communities and also found that barriers to having accounts included having to maintain minimum balances as well as confusion over what documentation would be needed to open an account. The survey was scheduled to be released Friday morning.
Not being connected to the mainstream financial system can create hardships for people, said DCA Commissioner Jonathan Mintz. For example, if they don’t have bank accounts, they would have to use check-cashing outlets to turn their paychecks into currency, and have to pay a fee for the transaction. Paying bills becomes more complicated if someone doesn’t have a bank account to draw from.
“For the individual, it’s sort of a poverty trap,” he said. “It’s just going to cost you more” than if you used a bank.
Participants, more than 1,300 immigrants from the three communities, were asked whether they had bank accounts or not, as well as if they had savings and savings goals, among other questions.
The survey found that the Chinese immigrants, with an average time of being in the United States of just under six years, were almost all likely to have bank accounts. The Ecuadorian immigrants surveyed had been in the U.S. an average of 11 ½ years, and about 65 percent had accounts. The Mexican immigrant participants were the least likely to have bank accounts, with 43 percent saying they did. They had been in the U.S. an average of just over 10 years.
When asked about what kept them from using banks, those without accounts gave reasons including not having enough money to meet minimum balances and pay fees. Some also expressed concerns about whether they would be able to open accounts if they didn’t have documentation like Social Security numbers, as well as concerns over language barriers.
But even those without bank accounts said they made a practice of saving money, and had goals like saving for their childrens’ education, buying a home, or sending money back to their native countries.
The report said the survey showed that there were steps that could be taken to get more immigrants in the banking system, like financial education campaigns and banks making sure immigrants knew about the language services available to them.
It’s important to get them involved, said Alfredo Espinosa, a management consultant at Qualitas of Life, a New York-based nonprofit that provides financial literacy to Hispanic people and their families.
He pointed to the discussion over immigration reform going on in Congress. If those here illegally are given an opportunity to legalize, it would most likely require them to show how long they’ve been in the United States and what kind of roots they’ve put down, he said.
Without a banking history, he said, “they are losing an opportunity to prove they’ve been living here.”