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Best Practices in Immigrant Lending

Some 1 million new Americans arrive on our shores every year to join the 33 million other immigrants who are making America their home. These men, women and children, families, entrepreneurs, skilled workers, laborers and professionals require banking services to help them make a home here, and banks and financial institutions are gaining proficiency in meeting their financial needs. What do these new bank customers need most from a financial institution? What special tools and programs should banks put in place to serve them? How best can banks market their lending services to America's immigrants? And how can banks overcome such barriers to immigrant lending as less-than-complete identification records, poor or no credit history and even religious prohibitions against the paying of interest? In December 2003, the American Bankers Association contracted ShoreBank Advisory Services (SAS), the consulting and research arm of ShoreBank of Chicago, Illinois, to collect and catalogue best practices in immigrant lending across the country. The goal was to share the information among more banks, especially those hoping to increase their immigrant lending, and increase credit opportunities for immigrants. SAS interviewed 12 banks varying in asset size, geographic coverage and strategic focus. Community banks were the primary focus, with some representation from large national banks. What follows is a summary of the key approaches, strategies and programs that have proven successful in reaching the immigrant community with useful, cost-effective and flexible lending services.

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