Accessing Banking Services for Immigrants

Opening a bank account should be a top financial priority for everyone, including people who have immigrated to the U.S. Access to banking helps develop good financial habits and avoid high fees from alternative financial services. Immigrants — including those without documentation — have the same banking rights as U.S. citizens, though there may be some limitations and exceptions to services.

Be aware that federal law prohibits banks from discriminating based on national origin or immigration status during the application process. However, they usually need to verify your basic information, requiring documents and identification. Understanding your banking rights and financial services ensures you can access the financial services you need.

Opening a bank account as an immigrant depends on your documentation status and the bank's specific requirements. Although each bank and credit union has its own rules, anti-discrimination laws prevent them from discriminating based on national origin. They must apply the same documentation standards to everyone.

Before opening a bank account, research and choose a bank that meets your needs. Determine if the bank is insured by the Federal Deposit Insurance Corporation (FDIC), or if you prefer a credit union, look for National Credit Union Administration (NCUA) insurance for similar protection. This insurance keeps your money safe even if the institution fails. Compare features and fees, and consider services like online banking, mobile apps, proximity to branches and customer support in your preferred language.

When opening a new bank account, banks are legally required to gather basic information, such as your name, date of birth, address and identification. Here are the commonly needed documents to open a bank account:

Immigrants without documentation can still open bank accounts using alternative identification to replace the SSN, such as an Individual Taxpayer Identification Number (ITIN). ITINs are used for federal tax reporting and are available to residents and non-residents, regardless of immigration status.

Credit scores represent your creditworthiness and impact your ability to borrow money, the interest rates you receive from lenders and your overall financial opportunities. A good credit score can help you get loans, rent apartments and secure employment. As an immigrant, your credit score from your home country may not transfer, so start building your U.S. credit as soon as you open a bank account.

Some banks offer credit-building programs tailored for immigrants — keep an eye out for these options. If you have a credit history in another country, ask your bank if they can use it as a reference. Additionally, you can look for immigrant support groups, as some community organizations provide resources and support for building credit.

Most credit card companies require a credit check and an SSN. You may also need to provide earnings, employment history and personal information such as a U.S. address, name, date of birth and citizenship details. According to the Federal Trade Commission (FTC), immigrants without documentation can also get credit cards to build credit. Still, lenders may consider immigration status when approving or denying credit.

For people without an SSN, several financial technology (fintech) companies have developed credit products using an ITIN instead, such as Chime and TomoCredit. These products help establish and build credit history, making it easier to qualify for loans in the future.

Immigrants have the right to apply for loans and mortgages. Qualification for private student loans, personal loans, auto loans or mortgages varies by lender. Some lenders may not require proof of citizenship or immigration status if the applicant has an ITIN and proof of income. Additional identification, like a passport, may also be needed. There are limitations and exceptions, such as Deferred Action for Childhood Arrivals (DACA) recipients not being eligible for federal student loans but being able to obtain private student loans, personal loans or auto loans.

With proper documentation, immigrants can qualify for mortgages by showing stable income, a good credit history and a sufficient down payment. Lenders may also require legal residency documentation. For those without an SSN, ITIN mortgages are available, allowing undocumented immigrants to secure loans by demonstrating regular income.

People who have immigrated to the U.S. often need to transfer money, both domestically and internationally. Understanding the available options, associated costs and best practices can ensure efficient and secure transfers. Choose reputable providers to avoid scams and ensure a safe and smooth transfer. Verify the recipient's details to prevent delays or loss and monitor the transfer's progress using tracking numbers.

Here are some common questions about banking for immigrants in the U.S., along with their answers:

To further assist in your financial journey, here are some valuable resources providing information and support for immigrants navigating the U.S. banking system:

• Consumer Financial Protection Bureau (CFPB): This agency offers resources and tools to help consumers understand their rights and make informed financial decisions.
• Federal Deposit Insurance Corporation (FDIC): Provides banking information, including how to choose a bank and understand deposit insurance.
• Internal Revenue Service (IRS): Information on obtaining an ITIN and understanding your tax responsibilities.
• National Immigration Law Center (NILC): Offers resources and advocacy for low-income immigrants.
• U.S. Citizenship and Immigration Services (USCIS): This agency provides information on documentation needed for banking and financial services, including forms and instructions for immigrants.
• Bank On: A national initiative to help individuals, including immigrants, access safe and affordable banking services. They offer a list of certified accounts that meet national standards.
• National Endowment for Financial Education (NEFE): Offers educational resources to improve financial literacy, including budgeting, saving and credit management.
• Financial Literacy and Education Commission (FLEC): This commission provides resources to help consumers, including immigrants, make informed financial decisions.
• International Rescue Committee (IRC): This organization offers financial education programs for refugees and immigrants to help them navigate the U.S. financial system.
• Local Community Banks and Credit Unions: Many local banks and credit unions offer tailored services and programs for immigrants, including language support and financial education.