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The Financial Lives of Undocumented Immigrants

posted by Pamela Foohey

We know little about the financial lives and credit constraints of undocumented immigrants, partly because they are such a difficult to reach population. But Slips contributor Nathalie Martin gained access to this population in Albuquerque, New Mexico, interviewed 50 immigrants, and recently published a paper that provides an important glimpse into how this population handles money and finances. As the paper's title -- Giving Credit Where Credit Is Due: What We Can Learn from the Banking and Credit Habits of Undocumented Immigrants -- suggests, this population is leery of taking out credit, despite having so little income and savings that unexpected expenses quickly can become financial crises.

One of the most interesting, but expected findings is this population's extremely low level of savings. When asked if they could handle an unexpected expense of $100, three-quarters of respondents (37 of the 50) said they could not. But the majority of interviewees also expressed serious concerns with taking out credit, including via credit cards and the almost inevitable title loans (and payday loans, but most payday loans require a bank account, which a majority of respondents did not have). Indeed, they stated that they would rather ask family and friends for help, including help in trying to find work, which adds nuance to what we know about low-income individuals' feelings about relying on family and friends to deal with unexpected expenses (for instance, see Laura Tach and Sara Greene, Robbing Peter to Pay Paul). Martin's paper also contains data about how undocumented immigrants think about what ultimately often are legal problems and using (or not using) the legal system. Taken together, the paper provides a needed first glimpse into the financial lives of a subset of people who are in the country.


I run a consumer law program, and a little more than half of my clients are undocumented. The #1 predictor of how much credit they've used is how long they've been in the country. Recent arrivals tend to be extremely wary of the banking system and credit in general. But I have undocumented clients who've been here for 10+ years who have way more credit cards than I do. I even have plenty of undocumented clients who have gotten mortgages, based off of their ITINs. Now, granted, those credit cards are all extremely high APR, and those mortgages usually blew up in their face. But that's not to say they don't use credit.

Thanks for the comment, SYSM. The paper includes some data that aligns with your observations about use of credit cards, and also about the financing of cars and homes, which perhaps are the most interesting stories in the paper. The study's respondents did report using credit, which, also in line with your comments, I think over the long-term was almost necessary given lack of savings and the inevitability of unexpected expenses. Their reported attitudes toward using credit, though, seemed to differ in some respects from that reported about other lower-income individuals.

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