Julie M. Connelly

Like those who founded the country, immigrants today continue to pour into the United States with dreams of sharing in the wealth the nation has to offer.

But financial knowledge interwoven with the cultural fabric of the country is something a new resident has to learn. Enter the Savings for Success, a government-funded program to aid immigrants in establishing self-sufficient households.

The program will be run jointly by Citizens Bank of Massachusetts and the International Institute of Boston, an affiliate of Immigrant and Refugee Services of America, which provides services for immigrants and refugees.

“This is a brand-new initiative started by the federal government through the [U.S.] Office of [Refugee] Resettlement. The whole idea of Individual Development Accounts came about in the early ’90s,” said Kimberly Zimmerman, economic development coordinator at the International Institute of Boston.

“Asset-building programs are very interesting and the preliminary research leads us to believe that it’s good public policy. All social programs up until this point have really limited the ability of low-income families to really get ahead, because social programs tend to limit how many assets they can hold while receiving public assistance. IDA’s are different because they encourage people to save for themselves,” said Zimmerman.

According to the IIB, one in 10 Massachusetts residents is foreign-born. That represents a substantial portion of the Massachusetts economy. It’s important that immigrants are provided an education, said Zimmerman. The program is necessary for that reason because, in some of the countries from which the immigrants come, the banks are run by the government or can be untrustworthy, she said.

“Most people in America understand that our big banks are FDIC insured; their money is safe in banks. But newcomers to our country may not have that understanding. So there’s a cultural component. Then, of course, there’s a match rate. Anyone can open a savings account and earn interest, but no one is going to be able to actually triple their money by just depositing it into a savings account,” said Zimmerman.

‘Long-Term Customers’
Citizens became the banking partner of the program because of a two-year working relationship it had with the IIB, said Julie M. Connelly, vice president of community investment at Citizens Bank of Massachusetts.

The immigrant community was targeted as a result of research. “We financed a study that MASS Inc. did on the labor force in Massachusetts and how dependent it is on the immigrant community,” said Connelly. The study found that foreign immigrants were responsible for 82 percent of the growth in the commonwealth’s labor force from 1985 to 1997.

“Because of that, we wanted to make sure that immigrants have the support they need here in Massachusetts so they won’t leave,” said Connelly.

“One of the other reasons that we do it is because 10 percent of our employees speak English as a second language,” she said.

About 60 participants will be chosen through the course of the year in three cycles.

“The big incentive, of course, in this program is the match rate. There is a two-to-one match rate. For every dollar that our participants save, the federal government is going to kick in two dollars,” said Zimmerman. The match program is limited to $2,000 for individuals and $4,000 for families.

Individuals will set up accounts through the bank and attend workshops and receive individual counseling by the IIB in order to reach their goals, whether that is buying a car or house or receiving professional development training.

“Whereas these aren’t all necessarily appreciating assets – cars or computers are going to depreciate instead of appreciate over time – the belief is that by providing people with these tools, their chance at economic self-sufficiency is going to improve over time. They’re going to become more independent, more able to provide for themselves and their children. They’ll be less of a burden on public assistance services and have more control over … living their life successfully in the United States,” said Zimmerman.

Participants must meet criteria set up by the federal government in order to be considered. It includes the following: they must be refugees, asylees, or Haitian/Cuban entrants who are not yet citizens of this country. Their total yearly household income must be within 200 percent of the poverty level and the total net worth of the household value – excluding the value of a home – must be less than $10,000.

“We’re really optimistic that this will be a successful program and really a great way to foster economic self-sufficiency among the lower-income refugees that we serve,” she said.

Citizens also hopes to benefit from the program, said Connelly. “Our hope would be that they become long-term customers of the bank. They’ll start out with one savings account, but we hope that as they become settled here that we will have the opportunity to provide mortgage loans, home equity loans and small business loans. Hopefully, individuals who participate in the program will be very pleased by the service provided by Citizens Bank and refer other members of their community,” she said.

The program is being introduced through nine local refugee service providers, and Zimmerman expects the first selection process to be completed by the end of this month. Citizens will waive monthly savings account fees and service charges.

Program Encourages Immigrants To Save, Become Self-Sufficient

by Banker & Tradesman time to read: 3 min