Citigroup’s Investment in Soon-to-Be Citizens

By supporting a microloan program to cover citizenship fees, the megabank tries to appeal to immigrants.

Immigrants take oath of citizenship to the United States on Nov. 20, 2014 in New Jersey.
John Moore AFP/Getty
July 6, 2015, 9:11 a.m.

After liv­ing in the United States for nearly a dec­ade and a half, Juan de la Rosa Mar­tinez knew he was ready to be­come a cit­izen. The 49-year-old gen­er­al con­tract­or—ori­gin­ally from Ar­gen­tina but now liv­ing in a Mary­land sub­urb of Wash­ing­ton—was seek­ing more sta­bil­ity in his ad­op­ted home­land. He and his wife also wanted to be cer­tain their two teen­age chil­dren would have ac­cess to any gov­ern­ment be­ne­fits they might need someday.

The cit­izen­ship ap­plic­a­tion fees, however, presen­ted a chal­lenge. Al­though he earned roughly $44,000 a year as a con­tract­or, renov­at­ing bath­rooms and kit­chens, the fees for him­self and his wife amoun­ted to $1,360.

“I have in­come, but it’s not li­quid be­cause I have ex­penses, like build­ing ma­ter­i­als,” he says. “I didn’t have the money avail­able.”

He found a solu­tion through CASA de Mary­land, an es­tab­lished non­profit or­gan­iz­a­tion that serves im­mig­rants throughout the state. The pro­gram squared with CASA’s mis­sion; since 1985, the group has ad­voc­ated for Latino im­mig­rants, such as by of­fer­ing Eng­lish classes and by find­ing sites for day laborers to gath­er. In 2011, CASA star­ted a part­ner­ship with Cit­ig­roup to of­fer mi­cro­loans to cov­er the fees for im­mig­rants who ap­ply for U.S. cit­izen­ship.

In re­cent years, the bank­ing com­pany has giv­en more than $1 mil­lion to CASA for its im­mig­ra­tion work, in­clud­ing a $100,000 grant this year for the group’s ef­forts to pro­mote cit­izen­ship. For Cit­ig­roup, the pro­gram is a farsighted ef­fort to curry fa­vor with new Amer­ic­ans who might well be­come fin­an­cial cus­tom­ers. One of every sev­en Marylanders is for­eign-born; in New York, where Citi also spon­sors cit­izen­ship pro­grams, the pro­por­tion is one-in-three. Among im­mig­rants who aren’t cit­izens, 23 per­cent don’t use a bank, ac­cord­ing to a 2013 re­port by the Fed­er­al De­pos­it In­sur­ance Corp., but the fig­ure shrinks for nat­ur­al­ized cit­izens to just 5 per­cent. For a bank, more cit­izens means more busi­ness.

It’s sur­pris­ing, in fact, that so few im­mig­rants both­er to seek cit­izen­ship, a status that con­fers im­munity from de­port­a­tion, the right to vote, and the pos­sib­il­ity of fed­er­al aid for col­lege. Only about 60 per­cent of eli­gible im­mig­rants were nat­ur­al­ized in 2011, ac­cord­ing to the Pew Re­search Cen­ter’s latest stat­ist­ics. Roughly 10 mil­lion people passed up the op­por­tun­ity to ap­ply, more than half of them from Lat­in Amer­ica or the Carib­bean.

Many im­mig­rants are de­terred by lan­guage bar­ri­ers or simply a lack of in­terest. But for some, an obstacle is the cost of ap­ply­ing. Of the 3,300 people CASA has helped with cit­izen­ship ap­plic­a­tions since Citi got in­volved, about 400 ap­plic­ants have asked for a six- or nine-month loan to cov­er the $680 ap­plic­a­tion fee.

The pro­gram’s big­ger suc­cess is that it helps ex­plain the value of cit­izen­ship to im­mig­rants and de­mys­ti­fies the ap­plic­a­tion pro­cess, ac­cord­ing to Bob An­ni­bale, glob­al dir­ect­or of Citi Com­munity De­vel­op­ment. Some of the im­mig­rants who ask about mi­cro­loans find they’re eli­gible for a waiver in fees or can bor­row the money from their fam­ily. But even if the loan isn’t ne­ces­sary in the end, An­ni­bale points out, its avail­ab­il­ity makes cit­izen­ship seem more at­tain­able.

And Citi wants to be there to help. For im­mig­rants who go through the emo­tion­al pro­cess of chan­ging their cit­izen­ship, “it’s clearly not just build­ing a na­tion­al iden­tity and be­com­ing an Amer­ic­an,” An­ni­bale ex­plains. “They’re build­ing a fin­an­cial iden­tity.”

George Esco­bar, seni­or dir­ect­or of health and hu­man ser­vices for CASA de Mary­land, ac­know­ledges Citi’s busi­ness in­terest in help­ing im­mig­rants gain ac­cess to cred­it. But, he adds, “they ul­ti­mately want to see a pro­gram that just helps gen­er­ate cit­izens.”

While the loans them­selves are un­der­writ­ten by two com­munity de­vel­op­ment fin­an­cial in­sti­tu­tions, funds from Citi have been used to ad­min­is­ter the pro­gram, in­clud­ing staff­ing for fin­an­cial edu­ca­tion, co­ordin­at­ing the loan pro­gram, and mon­it­or­ing pay­ments. The bank gets a brand­ing boost, too: some pro­gram ma­ter­i­als clearly state Citi’s in­volve­ment as one of the back­ers, ac­cord­ing to Esco­bar. Citi doesn’t have branches in Mary­land, but it has cred­it cards and oth­er fin­an­cial products avail­able to con­sumers across the coun­try.

“Yes, there’s an in­terest that a fin­an­cial in­sti­tu­tion might see from folks that now have a more stable cred­it rat­ing and they’re able to ap­ply for more products,” Esco­bar said. “That’s what this eco­nomy is built on.”

For im­mig­rants who take ad­vant­age of the Citi-sup­por­ted mi­cro­loan pro­gram, the be­ne­fits can ex­ceed the ob­vi­ous. Mar­tinez and his wife took out a loan for their fees last sum­mer and paid it back with­in six months. Bet­ter than the in­terest rate of 9 per­cent, in Mar­tinez’s mind, was the chance to im­prove his cred­it rat­ing, bring­ing him one step closer to his goal of pur­chas­ing a home.

Mil­lions more may find them­selves in search of a bank and a cred­it rat­ing if Pres­id­ent Obama suc­ceeds in his at­tempt, so far sty­mied by the courts, to let a roughly 4 mil­lion un­doc­u­mented im­mig­rants ap­ply for work per­mits and avoid de­port­a­tion. “The biggest bang for the buck comes from the pop­u­la­tion that has been in the shad­ows un­til this point,” CASA’s Esco­bar says. “Their ac­cess to cred­it re­sources is zero. Their abil­ity to cre­ate a cred­it his­tory is zero. … We’re very happy to con­nect them.”

Con­sider the busi­ness pos­sib­il­it­ies posed by the likes of Maria Fa­ci­olince, a 62-year-old grand­moth­er from Colom­bia who took out a cit­izen­ship loan. She works at a U.S. nav­al fa­cil­ity in Beth­esda, Mary­land, which prefers its work­ers to be cit­izens. Even more im­port­ant to her is ex­er­cising the right to vote—”to par­ti­cip­ate in the polit­ic­al pro­cess” so that her daugh­ter and grand­chil­dren, who live with her, will thrive. She paid off the loan in March; her cit­izen­ship in­ter­view is sched­uled for Ju­ly.

She has told friends who might be eli­gible for cit­izen­ship of her suc­cess in ob­tain­ing a mi­cro­loan. “I’ve already re­com­men­ded it to two people,” she says. “They’re in the pro­cess, too.”

This story has been up­dated.

Cla­ri­fic­a­tion: This piece has been up­dated to cla­ri­fy that Cit­ig­roup does not ser­vice the ac­tu­al mi­cro­loans but in­stead provides fin­an­cial sup­port for the pro­gram. The mi­cro­loans are ser­viced by the Latino Eco­nom­ic De­vel­op­ment Cor­por­a­tion and the Ethiopi­an Com­munity De­vel­op­ment Coun­cil/ En­ter­prise De­vel­op­ment Group.

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