Immigration deal’s expensive proposition

When in need of large sums of cash for emergencies or major purchases, they tend to turn to friends and family or loan sharks. Many immigrants go to predatory lenders that charge as much as 300 percent interest on short-term loans.

“Every day you see people victimized,” said Guillermo Zuniga of Banuestra, a metro Atlanta financial services company that serves about 20,000 Hispanic immigrants. The company is trying to develop a loan program for some of its customers who might need to pay the fees should the reform pass.

Even if they have the cash, money transfer offices also may try to tack on exorbitant fees, Moser said. The complexity of the proposed process could also drive many applicants to get scammed while seeking assistance in doing the paperwork.

“They won’t just go to predatory lenders; they’ll go to predatory service providers,” said Donald Kerwin, executive director of the Catholic Legal Immigration Network.

After amnesty legislation passed in 1986, storefront “immigration specialists” promised to expedite the legal process for retainers of up to $3,000, and then would simply vanish with the money.

Under pressure from regulators and others, major banks are experimenting with offering small loans and credit cards to illegal immigrants and others without a Social Security number.

“The financial institutions are really interested in this, as this is probably the single largest untapped market” in the United States, said banking consultant Rick Fischer of the San Francisco-based firm Morrison & Forester.

If an immigrant has no traditional credit report, banks may look at the person’s rent and bill-paying history as a way of determining whether the customer can repay a loan, Fischer said.

Jose Lagos, head of the Miami-based advocacy group Honduran Unity, said he believes many immigrants will find ways to pay the fines and fees without having to turn to the black market.

“People will work two and three jobs. They are going to cut their expenses. I have heard people saying, ‘I’m going to cut how much I’m sending home,”’ he said. “I have people who have told me already, ‘I’m saving the $5,000. I don’t care. At the end of the day I’m going to get my resident card.”’

Advocates also hope the final legislation will carry significantly lower fines.

“It would be self-defeating and not encourage people to come forward if they see $5,000 as an insurmountable fine,” said Jerry Gonzalez of the Georgia Association of Latino Elected Officials.

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