F or the past several decades, global flows of people have been as dynamic as international

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2 By Michael A. Frias F or the past several decades, global flows of people have been as dynamic as international financial flows across borders. According to the 2000 census, an estimated 31.1 million immigrants are in America today, and more than 78 percent come from Latin America or Asia. Mexico alone accounts for 9.2 million (30 percent) of the total foreign-born population. If the immigration policies and trends of the early 1990s continue, the Latin American population in the United States is expected to grow by 258 percent between 1995 and 2050, compared with 50 percent for the nation a whole. 1 Recently released figures from the Autonomous University of Zacatecas support these forecasts. One million people from Latin America are estimated to have entered the United States in 2002; 450,000 were Mexicans. 2 Ultimately people follow economic opportunities. In the case of the United States, many Latin Americans emigrate to this country so that they can send economic resources back to their homelands. This is a major motivation in their decision to come to the United States. 3 In the United States 42 percent of adult foreign-born Hispanics send money regularly, according to the 2003 national survey of Latinos conducted by the Pew Hispanic Center and the Kaiser Family Foundation. 4 Michael A. Frias Community Affairs Officer Chicago Regional Office Federal Deposit Insurance Corporation 230 S. LaSalle St. Chicago, IL Mfrias@FDIC.gov Remittance Flows The flow of labor and the subsequent financial flows from immigrant workers back home to their families are most apparent between Latin America and the United States. New research conducted by the Inter-American Development Bank documents that remittance flows to Latin America and the Caribbean will reach nearly $40 billion by the end of Approximately $30 billion of these flows originates in the United States. 5 If future growth rates are maintained, remittances to Latin America could reach $300 billion by the end of By the end of 2003, remittance flows to families in Mexico soared to $13.3 billion, a flow of $36 million a day. 7 These financial flows are a crucial part of the Mexican economy and have surpassed the dollar amount generated by tourism and foreign investment. Oil exports remain number one. 8 An estimated 10 percent or more of that money, at least $1.4 billion, is captured in the form of fees paid for wire trans- 1 RANDY CAPPS ET AL., URBAN INSTITUTE, THE NEW NEIGHBORS: A USER S GUIDE TO DATA ON IMMIGRANTS IN THE U.S. COMMUNITIES (2003). 2 Ginger Thompson, A Surge in Money Sent Home by Mexicans, NEW YORK TIMES, Oct. 29, Roberto Suro et al., Pew Hispanic Center & Multilateral Investment Fund, Billions in Motion: Latino Immigrants, Remittances and Banking 6 (2002). 4 Roberto Suro, Sending Home the $30 Billion Bacon, MIAMI HERALD, Nov. 28, Press Release, Office of Rep. Barney Frank (D Mass.), International Remittance Services Qualify for CRA Credit: Committee Members Welcome Bank Regulators Agreement on Remittances (June 4, 2004). 6 Sheila C. Bair, Assistant Secretary for Financial Institutions, Remarks at the Multilateral Investment/Inter-American Development Bank Second Regional Conference on Impact of Remittances as a Developmental Tool (Washington, D.C., Feb. 28, 2003). 7 Remittances to Mexico Hit Record $13.3 Billion, ASSOCIATED PRESS, Jan. 30, Thompson, supra note Clearinghouse REVIEW Journal of Poverty Law and Policy September October 2004

3 fers, particularly from people without legal status who may lack proper documentation to have banking accounts. 9 Much of the money sent back home to relatives is spent on subsistence items such as food, clothing, education, and housing. Ultimately the principal reason people remit money back home is to help take care of basic family needs. According to a recent study by the Inter- American Development Bank, [m]ore than 60% of the 16.5 million Latin American born adults currently living in the United States send money home on a regular basis. These 10 million immigrants remit on average 12.6 times a year and the average remittance transfer is between $150 [and] These individual money transfers result in over 100 million separate transfers every year by America s lowest-paid workers. 11 Many Latin American remittance senders living in the United States do not have a bank account. For example, 65 percent of Ecuadorians have accounts compared to only 36 percent and 25 percent of Salvadorans and Mexican immigrants, respectively. 12 For many Latin American immigrants, legal status and lack of documentation are the principal reasons for not having an account. 13 Hence most remitters rely on currency exchanges to cash checks and high-cost money transfer companies to send money to their relatives in Latin America. The biggest beneficiaries of these financial flows and the lucrative fees associated with remittances are money transfer companies. Western Union and Money Gram are among the biggest players in this market. The former has 6,000 offices, including post offices, throughout Mexico. 14 For many years, these companies had little competition. However, because they can offer lowercost remittance products, many banks and credit unions have entered this growing market. The competition has reduced the cost in half from 15 percent of the total amount in the late 1990s to a current average of 7.32 percent by early Remittances present an emerging market opportunity on which national banks in the United States are trying to capitalize by linking them to banking services. Large national banks such as Citigroup, Bank of America, Wells Fargo, and US Bank and smaller community banks such as Second Federal Savings of Chicago and Mitchell Bank of Milwaukee are leading the way. However, many undocumented immigrants lack traditional forms of identification required to open accounts; this prevents them from entering the financial mainstream and leaves them vulnerable to higher-cost, less regulated financial service providers. Banks in the United States typically accept social security numbers and driver s licenses as forms of identification for opening accounts. If banks intend to bring unbanked immigrants into the financial mainstream, they would have to consider accepting alternate forms of identification. U.S.-Mexico Partnership for Prosperity In September 2001 President Bush and Mexican President Vicente Fox launched the U.S.-Mexico Partnership for Prosperity. The partnership delineates ways for the two countries to increase economic and labor opportunities in less 9 Bank Calls Purchase Way to Woo Hispanics, NEW YORK TIMES, Dec. 12, Donald Terry, Remarks at the Inter-American Development Bank Conference on Sending Money Home: The First Stateby-State Analysis of Remittances from the United States to Latin America (Washington, D.C., May 17, 2004). 11 Id. 12 Manuel Orozco, Pew Hispanic Center, The Remittance Marketplace: Prices, Policy and Financial Institutions 19 (June 2004). 13 Sheila Bair, Center for Public Policy and Administration, University of Massachusetts, Amherst, Improving Access to the U.S. Banking System Among Recent Latin American Immigrants 2 (Feb. 27, 2003). 14 Remittances, supra note Orozco, supra note 12. Clearinghouse REVIEW Journal of Poverty Law and Policy September October

4 developed areas of Mexico and to expand and broaden access to capital in Mexico. 16 The partnership specifically addresses the growing problem of the high cost of sending money from the United States to Mexico and encourages more mainstream banks to market aggressively the opening of accounts to Mexican workers and offer remittance features in their accounts. 17 Offering the remittance features would increase competition in the money transfer business, reduce transfer costs, and open the door for traditional banking institutions to provide money transfer and other banking services to the immigrant market at lower costs. The fees associated with sending money to family and friends living abroad remain high, averaging 12.5 percent, or $4 billion annually. 18 On January 13, 2004, at a special summit with Latin American leaders President Bush reaffirmed the White House commitment to reduce by at least 50 percent the cost of sending money home to family members and local communities by Mexican Immigrant Market The demographics of the Mexican community make it highly desirable as a new customer base for banks. Characteristics of the Mexican immigrant market include 20 being the fastest-growing immigrant market; being a young market; having multiple wage earners in the household; having increasing buying power; tending to operate in a cash economy; tending to choose financial institutions by word of mouth; and being a loyal customer base. Barriers to Immigrant Banking Several major barriers contribute to the high number of unbanked immigrants and their low homeownership rates: Unfamiliarity with the U.S. banking system. For example, in Latin America, 90 percent of remittance recipients are unbanked. Approximately 50 percent of all Latino immigrants in the United States do not have access to financial institution services; hence they are unfamiliar with the credit approval process and requirements. 21 Limited ability to understand and speak English. Cultural distrust of financial institutions. Inability to document conventional credit histories or document earnings. 22 These barriers, though daunting, are not insurmountable. A number of innovative approaches and solutions involve the acceptance of alternative forms of identification to open bank accounts that are currently being implemented across the country, especially in the Midwest. Alternate Forms of Identification The matricula consular is an identification card issued by the Mexican consulate to individuals of Mexican nationality living in the United States. The matricula card has been issued in Mexican consulates worldwide since 1871 and does not create an 16 Office of the Press Secretary, The White House, Fact Sheet (Washington, D.C., March 22, 2002). 17 Partnership for Prosperity, Report to Presidents Vicente Fox and George W. Bush in Monterrey Mexico 3 (March 22, 2002) (on file with Michael Frias). 18 Office of the Press Secretary, The White House, Fact Sheet: Lowering the Cost of Remittances (Washington, D.C., Jan. 13, 2004). 19 Id. 20 Mari Gallagher, Metro Chicago Information Center, Matricula Cards and the Mexican American Market: Exploring the Growing Practice in the Midwest and Beyond 5 (Dec. 10, 2003). 21 Terry, supra note 10, at ANDREW I. SCHOENHOLTZ & KRISTIN STANTON, GEORGETOWN UNIVERSITY INSTITUTE FOR THE STUDY OF INTERNATIONAL MIGRATION, REACHING THE IMMIGRATION MARKET: CREATING HOMEOWNERSHIP OPPORTUNITIES FOR NEW AMERICANS 3 (2001). 414 Clearinghouse REVIEW Journal of Poverty Law and Policy September October 2004

5 inference regarding a person s immigration status. 23 According to a study by the Pew Institute, 740,000 matriculas were issued in the United States during the first nine months of Nationally 118 banks (including 19 national banks) accept the matricula to open bank accounts. Of these, 86 are concentrated in the Midwest and 44 are located in Chicago. 25 Currently 27,976 or 32 percent of the 88,713 total bank offices in the United States accept the matricula to open accounts. 26 Individual Taxpayer Identification Number The U.S. Internal Revenue Service (IRS) created the individual taxpayer identification number (ITIN) on July 1, 1996, for foreign-born individuals who are required to file federal tax returns. The ITIN is a ninedigit number similar to the social security number (SSN) and is issued to individuals who are not eligible for an SSN. The ITIN does not give access to social security benefits or the earned income tax credit and does not give one the right to work in the United States. Because it is available to a range of foreign-born persons, the ITIN does not create an inference regarding a person s immigration status. The IRS has issued seven million ITINs since A growing number of banks and credit unions in the United States accept the ITIN in lieu of SSNs to help taxpaying immigrants open interest-bearing bank accounts and secure other banking services. USA Patriot Act The Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (USA Patriot Act) was passed in the aftermath of the September 11, 2001, terrorist attacks to give federal law enforcement agencies and regulatory banking officials important new tools in the fight against terrorist financing and money laundering. 28 One of the provisions in Section 326 of the Act stipulates that banks adopt a customer identification program for all new accounts, including a deposit account and a credit account, whether or not the customer is a U.S. citizen or foreign national. Section 326 of the Act authorizes financial institutions to distinguish between U.S. persons and a non-u.s. person for the purpose of determining acceptable forms of identifying information. The final rule provides that from a non-u.s. person a bank must obtain one or more of the following: a taxpayer identification number (SSN, ITIN, or employer identification number); passport number and country of issuance; alien identification number; or number and country of issuance of any other government-issued document evidencing nationality or residence and bearing a photograph or similar safeguard. 29 Thus the final regulation does not discourage bank acceptance of the Matricula Consular identity card that is issued by the Mexican government to immigrants. 30 With respect to the ITIN, the U.S. Department of the Treasury encourages 23 THE LOCAL APPROACH: MIDWESTERN MEXICANS: THE NEW CONSULATE GENERAL OF MEXICO 44 (Mexican Consulate of Chicago 2004). 24 World Bank, Workers Remittances: An Important and Stable Source of External Development Finance 129, (2003). 25 Press Release, Consulate General of Mexico, New Alliance Task Force Announces Preliminary Results (Dec. 10, 2003) (on file with Michael A. Frias). 26 Gallagher, supra note 20, at Press Release, Internal Revenue Service, IRS Announces Revisions to ITIN Applications (Dec. 17, 2003) (on file with Michael A. Frias). 28 Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (USA Patriot Act), Pub. L. No , 115 Stat. 272 (2001). 29 Customer Identification Programs for Banks, Savings Associations, Credit Unions and Certain Non-Federally Regulated Banks, 31 C.F.R. pt. 103, RIN 1506-AA31 (2004). 30 U.S. Department of the Treasury, A Report to Congress in Accordance with 326(b) of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (USA Patriot Act) 16 (Oct. 21, 2002). Clearinghouse REVIEW Journal of Poverty Law and Policy September October

6 financial institutions to obtain an ITIN in lieu of an SSN as part of their accountopening procedures. 31 However, the Treasury Department and the bank regulatory agencies emphasize that the final rule neither endorses nor prohibits bank acceptance of information from particular types of identification documents issued by foreign governments. 32 In its report to Congress, the Treasury Department recognized the need to strike a balance between law enforcement objectives and the ability of financial institutions to serve unbanked immigrants living and working in the United States. 33 New Alliance Task Force The New Alliance Task Force was launched in May 2003 by the Consulate General of Mexico in Chicago and the Federal Deposit Insurance Corporation (FDIC) Community Affairs Program in support of the Bush-Fox Partnership for Prosperity. The task force s main goal is to improve access to the U.S. banking system among recent immigrants from Mexico. The task force is a broad-based coalition of sixty members (the Mexican consulate, banks, community-based organizations, federal regulators, government agencies, and representatives from the secondary market and private mortgage insurance companies). It meets on a quarterly basis to address the critical need among Mexican immigrants, both established and recently arrived, to develop asset-building strategies to improve their quality of life in the United States. The task force strives to provide immigrants with financial education support services, increase their financial skills, give them opportunities to pursue higher education, and improve their access to the U.S. banking system. Its mission is vital because Latinos continue to have less access to wealth-building vehicles as measured by every known economic indicator. The task force consists of four major working groups: financial education, bank products and services, mortgage products, and social projects. Each working group is responsible for a specific area of the initiative, and each component is vital to the overall success of the initiative. Financial Education Working Group. The working group on financial education is focused on providing financial education services to immigrants. Studies show that financial education programs help lowincome adults build savings, reduce their debt burden, clean up their credit records, and help them enter the U.S. banking system. 34 The more immigrants know about credit and banking services, the more likely they are to increase savings, buy homes, and improve their financial health and well-being. To date, close to 35,000 immigrants have participated in financial education classes and workshops using the FDIC s adult financial education curriculum, Money Smart (in English, Spanish, and Chinese), and similar financial education programs in the Chicago area. The Spanish-language translation of Money Smart was officially launched in Chicago in June 2002, and a growing number of Spanish-serving community-based and nonprofit groups have been using the curriculum in financial education classes targeted to limited-english-speaking immigrants. The classes cover an array of topics including taxpayer education, home-buyer education, the importance of savings, predatory lending, an introduction to bank services and credit, and consumer rights. Bank Products and Services Working Group. The main responsibility of the bank products and services working group is to develop products to bank the 31 Id. at C.F.R. pt. 103 (2004). 33 Department of the Treasury, supra note Dory Rand, Financial Education and Asset-Building Programs for Welfare Recipients and Low-Income Workers: The Illinois Experience, 38 CLEARINGHOUSE REVIEW 49 (May June 2004). 416 Clearinghouse REVIEW Journal of Poverty Law and Policy September October 2004

7 unbanked and to encourage financial institutions to develop financial service products with remittance features as a way to reach the unbanked immigrant community. In recent years U.S. banks have begun to realize the significant dollar amounts generated by remittance transfers and have taken steps to break down some of the barriers preventing immigrants access to the banking system. Furthermore, they recognize that a large number of those remitting funds represent a potential client base for their institutions because many remitters are unbanked. Recent statistics show that 75 percent of Mexican remitters do not have a mainstream bank account. 35 Many immigrants will eventually settle in the United States, thus offering an opportunity for banks to cross-sell other products that are more profitable. Consequently many banks now offer wire transfer services or products with remittance features or both (e.g., issuing two ATM (automatic teller machine) cards one for use in the United States and the other to be sent to the home country) as a vehicle to reach this market. Thirty-three banks in the Chicago and Milwaukee area (forty-eight nationwide) currently offer bank products with remittance features which allow immigrants to open bank accounts, avoid high-cost wire services, and lower remittance costs for immigrants sending money back home. The increase in the number of banks offering products with remittance features has had a direct impact on the immigrant market: four years ago the cost of sending remittances to Latin America averaged 15 percent of the remitted amount; today the average cost has fallen to 7.32 percent of the amount. Dual ATM cards or stored-value cards offered by banks present the lowest costs 1.5 percent. 36 Banks also offer wire transfers at much lower fees than commercial wire transfer companies. Reducing remittance costs from 15 percent to 5 percent of the amount remitted would free up millions of dollars making a real difference for some of the poorest households in the Midwest. Mortgage Products Working Group. The goal of the working group on mortgage products is to help banks develop for immigrants loan programs that can be held in the bank s portfolio as well as be sold on the secondary market. Homeownership remains the primary asset for most American families, and, according to one study, homeownership is the principal determinant of wealth. 37 Housing is the economic engine driving our nation s economy out of recession. Low mortgage rates, reduction in down payment requirements, and expansion of the portfolio of products for new home buyers and refinancing homeowners are all elements contributing to the strength of the housing sector. In addition, increases in immigration and, in particular, the increases in suburban immigration populations, are critical to the continued growth of the housing sector. Recent estimates indicate that immigrants will account for more than 25 percent of new home buyers in Chicago area suburbs. Similar rates of growth are expected in other areas of the region. This percentage would likely be larger if the housing market were able to originate mortgage loans to a broader section of the immigrant population. The Selig Center for Economic Growth at the University of Georgia estimates that Hispanic purchasing power in the United States will jump 89 percent between 2000 and 2007, from $491 billion to $926 billion. Fifty percent of Hispanics are foreignborn, and immigrant households are projected to grow in the 21st century at a rate representing more than 25 percent of overall household growth. Yet the homeownership rate among immigrants is 47 percent compared to 68 percent for native-born Americans clearly 35 Orozco, supra note Id. at Charles Kamasaki & Laura Arce, Financial Services and Hispanic Americans, ISSUE BRIEF, No. 2 (National Council of La Raza, Washington, D.C.), Aug Clearinghouse REVIEW Journal of Poverty Law and Policy September October

8 delineating a disparity in the housing market and a potential new market for lenders. The homeownership rate among foreignborn Hispanics climbed in 1999 to 40 percent, representing the banking industry s growing appreciation of a largely untapped home-buyer market. 38 The longer immigrants live in the United States, the more likely they are to purchase homes. The number of foreign-born owner households is projected to grow by 2.2 million between 1995 and Immigrants present a largely untapped home-buyer market. Social Projects Working Group. The social projects working group concentrates on educating immigrants. The low education level of many Mexican immigrants affects their socialization and creates additional obstacles to assimilation, especially for those who lack legal residency or citizenship status. The social projects working group is focused on developing scholarship funds and economic support for plazas comunitarias, the Mexican government s effort to offer formal and informal education to Mexicans and Spanish-speaking students using the most advanced technology and learning methodologies. Task Force Results Over the past year the New Alliance Task Force working groups have been working diligently to develop their individual programs and have achieved outstanding results. Financial Education. In 2004 the Mexican Consulate of Chicago, in collaboration with local banks, launched a financial education program in Spanish. Several banks have donated dummy or simulated ATMs to the consulate to be used as an educational tool for immigrant clients. Numerous nonprofit organizations and banks (many of them task force members) currently offer ongoing financial education or home-buyer classes or both in the Chicago area. For example, in Chicago s Back of the Yards community, financial education classes are offered to Spanish-speaking immigrants through Holy Cross Church s pre-cana marriage education program. Over 250 parishioners have participated in the program. Bank Services and Products. To date, 50,000 new accounts totaling $100 million in deposits have been opened by using alternate forms of identification. The average account balance is $2,000. About 30 banks in the Midwest offer bank products with remittance features making for a lower-cost alternative to send money back to Mexico. Seven banks have received approval from the IRS to become certified acceptance agents, thus allowing them to process W-7s to enable their customers to obtain an ITIN. Mitchell Bank of Milwaukee, Wisconsin, established a full-service bank facility, Cardinal Bank, at South Division High School in August 18, 2000, to teach students banking and savings practices and individual money management. Many of the area residents are young, lowincome immigrant families who are undocumented and in need of bank services; 70 percent of the school is Latino, and 43 percent are unbanked. The bank has processed 386 applications for ITINs and opened over 345 accounts for previously unbanked customers. Product features include low balance requirements, an international remittance product (dual ATM cards), and an ITIN-based mortgage product. Mortgage Products. Conventional approaches and conventional mortgage products are often out of reach for lowincome immigrants. The task force mortgage working group has created a model loan product, the New Alliance Model Loan Product, to overcome major barriers that contribute to immigrants relatively low homeownership rates. Modeled on successful loan products used by community banks in Milwaukee and Chicago, it is intended for use by potential homeowners who pay taxes by using an ITIN. The loan product considers alternative credit information, including references from a landlord, a parish priest or minister, and a phone company or other utility. The loan 38 Schoenholtz & Staton, supra note Clearinghouse REVIEW Journal of Poverty Law and Policy September October 2004

9 product requires program participants to complete a home buyer education program. Several banks in the New Alliance Task Force, including Second Federal Savings Bank (Chicago, Illinois) and Mitchell Bank (Milwaukee, Wisconsin), have developed unconventional mortgage programs to help immigrants, including undocumented residents, qualify for existing home loan programs. Mitchell Bank actively markets its Community Mortgage Program, which accepts ITINs issued by the IRS in lieu of SSNs and accepts the matricula and other foreign-government-issued identification. The absence of a credit history is not a reason for denial. All participants in the program are required to complete a home buyer education program, which includes an instructional video about the responsibilities associated with homeownership. Second Federal Savings Bank launched a mortgage program in June 2002 to serve the unbanked immigrant community by accepting the matricula card and ITIN as forms of identification to underwrite mortgage loans. Monies pooled from tandas (nontraditional Mexican savings groups) can be used by customers toward down-payment requirements. Currently fourteen community banks in the Midwest originate mortgage loans utilizing the ITIN. Mitchell Bank and Second Federal Savings report excellent performance, a zero late pay rate, and no defaults. Five large national banks are considering pilot programs. Secondary market pilot programs to purchase mortgage loans using nontraditional forms of identification are being piloted by the Neighborhood Housing Services of America and the Wisconsin Housing and Economic Development Authority. Other secondary market players are considering pilot programs. Two private mortgage insurance companies insure bank products utilizing the ITIN. A third is considering it. Community Reinvestment Act In June 2004 federal banking regulators reached an agreement that financial institutions should receive Community Reinvestment Act credit for offering lowcost international remittance services. This is an effort to encourage more banks to enter the remittance market and improve access to the U.S. banking system among recent Latin American immigrants. Regulated financial institutions are required under the Act to serve the convenience and credit needs of the communities including low- and moderate-income families and neighborhoods in which they are chartered to do business. Most remittance senders to Latin America are low- to moderate-income immigrant wage earners and outside the formal banking system. The New Alliance Task Force model demonstrates that unbanked Latin American immigrants can be brought into the financial mainstream with the right mix of innovative products, creative marketing strategies, and cultural sensitivity, coupled with a strong commitment from banks to serve this market. Conventional approaches clearly do not work. As many banks, both small and large, are learning, cultivating this emerging customer base requires adopting a grassroots strategy aimed at reaching the Latino community; accepting alternative forms of identification; utilizing alternative delivery mechanisms to deliver financial education; adopting nontraditional underwriting criteria to originate mortgage loans; considering alternative delivery channels to deliver financial services; and offering innovative low-cost products with remittance features as a mechanism to draw immigrants into the financial mainstream. In targeting this new market, financial institutions, in collaboration with community-based organizations, will help immigrants along a migratory path to increase savings, build assets, improve their economic well-being, and close the wealth gap between Latino and other American families. Clearinghouse REVIEW Journal of Poverty Law and Policy September October

10 Guide to Consumer Rights for Immigrants The National Consumer Law Center s Guide to Consumer Rights for Immigrants (2002) is a userfriendly manual for immigrant and consumer advocates alike. The Guide identifies abusive consumer practices, enumerates the relevant state and federal laws on the subject, and offers practical advice about how immigrants can avoid exploitative schemes. The first few chapters of the Guide review budgeting, prioritizing debt, obtaining reasonable credit, and using banks. The chapter on Budgeting and Prioritizing Debt emphasizes the importance of budgeting for low-income families and discusses strategies for maximizing income, reducing expenses, prioritizing debt, and protecting income and assets from creditors. High Cost Credit discusses several types of high-interest loans, such as payday loans, pawnbroker loans, rent-to-own transactions, and tax refund anticipation loans. Cashing Checks and Opening Bank Accounts explains how documented and undocumented immigrants can open bank accounts. These chapters are particularly useful for immigration lawyers and advocates who do not deal with financial issues regularly. The Guide next summarizes three specific consumer law protection provisions developed for immigrants and non-english speakers: Federal Trade Commission Used Car Rule regarding vehicle sales conducted in Spanish State laws requiring translation of contracts for limited-english-proficient individuals State laws regarding unfair and deceptive trade practices. The largest portion of the Guide catalogs the numerous consumer issues that immigrants face. These issues fall into two main categories: those that are unique to immigrants and those that concern low-income consumers generally but affect immigrants in a distinctive way. Most of the issues, such as money wire transfers, used car fraud, and credit discrimination, discussed in the Guide concern low-income consumers generally, but these forms of fraud and abuse target immigrants in a particular way. For example, immigrants often use money wire transfer companies to send money to their home countries; the Guide recounts how these companies abuse immigrant customers by charging hidden fees for international transfers and by failing to inform them about the difference between the company s exchange rates and the prevailing market rate. The Guide identifies this problem, discusses state laws that regulate the money wire transfer industry, and suggests practical money-saving strategies for immigrants to use when sending money home. Two issues immigration consultant fraud and the enforcement of affidavits of support are unique to the immigrant community. Immigration consultants, also known as notarios, sometimes take advantage of immigrants desperation to obtain legal status in the United States for themselves or a loved one. These consultants usually set up businesses in immigrant communities to assist individuals seeking immigration benefits. While some are knowledgeable and helpful, others are ill-informed about immigration law and place their clients in danger of deportation. The Guide lists state laws regulating immigration consultants and offers advice for immigrant consumers, including a recommendation to seek free or low-cost legal services when possible. It goes on to note that immigrants working with nonattorneys should be advised of their rights to (1) a written contract; (2) in many cases, a translated copy of the contract; and (3) a provision in the contract explicitly stating that the consultant is not an attorney. Most immigrants who seek admission to the United States must obtain affidavits of support from a sponsor in the United States. The sponsor must have an annual income of at least 125 percent of the federal poverty line and be willing to provide support until the immigrant has completed forty qualifying quarters of work. Sponsors who fail to support the immigrant at the required level may face lawsuits from the government or the immigrant. The Guide cautions that the affidavit of support raises several consumer law questions, such as whether the affidavit is in fact enforceable and whether other creditors, such as landlords, may sue sponsors for debts that the sponsored immigrant incurs. For more information, the Guide suggests contacting immigration law specialists, such as the National Immigration Law Center or Catholic Legal Immigration Network. Ordering Information MARCIA HENRY You can order a copy of the Guide to Consumer Rights for Immigrants from the National Consumer Law Center. One complimentary copy per organization is available to qualified legal aid and nonprofit agencies that assist immigrants. For additional copies or for other organizations, the cost is $10 per copy. Send your order to National Consumer Law Center, 77 Summer Street, 10th Floor, Boston, MA 02110, or publications@nclc.org. 420 Clearinghouse REVIEW Journal of Poverty Law and Policy September October 2004