Community FCU Rolls Out Low-Cost Loans to Help Immigrants with Citizenship Fees
CHICAGO -- Permanent resident aliens living in the U.S. and seeking to become U.S. citizens will get a hand up from a program started by the $8 million North Side Community Federal Credit Union.
Dubbed the New Americans Loan Program, the money will go to help the new immigrants meet the rising cost of the citizenship application, the CU said.
Permanent residents are documented immigrants who are in the U.S. legally and who want to become U.S. citizens. The costs of applying for citizenship have increased significantly in the past few years and are expected to do so again this year. The New American loans from North Side will help immigrants pay the costs, often between $800 and $1,200 per couple of immigrants applying, North Side said.
Many of the Chicago area's permanent residents live in the credit union's field of membership, the credit union added.
North Side has partnered with immigrant centers in the area to help with the program. The centers will make certain the immigrants are at the place in the process where they need the money and North Side will make the checks payable to the Immigration and Naturalization Service. The loans will carry an interest rate of 10% and be repayable over six months. The CU expects to make 100 of the loans in the first year of the program.
In a related note, the state of Illinois used the occasion of the roll out of the program to announce that it will make deposits of $100,000 in each of 17 low-income designated credit unions, including North Side, around the state.
The discounted deposits will carry a 3.5% interest rate (1.5% below the market rate) for a 12- month period.
"This money can help provide the necessary resources these credit unions need to help low-income residents who might otherwise be forced to turn to payday lenders," said Illinois State Treasurer Alexi Giannoulias.
"The credit unions offer low-cost alternatives to high interest rate loans and fees so families won't end up in an endless cycle of debt," said Giannoulias, adding that these financial institutions offer low-interest loans that enable customers to pay off debt, afford housing, build credit, and receive financial counseling.
"We depend on the support from outside sources to offer these programs to community residents," said Ed Jacob, manager/CEO of North Side. "The state treasurer's commitment is important from a financial perspective but it also shows a commitment to improving people's lives."
The state will require North Side and other credit unions that receive state-backed deposits to document how they were used.
Since 2002, North Side has offered Payday Alternative Loans, which allow low-income families to borrow up to $500 for six months to make ends meet. These loans have an interest rate of 16.5%, as opposed to 400% or more for payday loans. Only 28 of North Side's 2,200 loans have been written off. "Our investment in 17 low-income designated credit unions throughout Illinois will pump $1.7 million into the local economy of communities that need it most, while helping working families meet their needs responsibly," Giannoulias said. --firstname.lastname@example.org