When immigrants lack a US Social Security number and US credit history, it can be difficult for them to access much-needed loans and credit cards. This can make building and improving credit a challenge. In 2017, Beneficial State Bank began accepting Individual Taxpayer Identification Numbers (ITINs) for customers without Social Security numbers and has since expanded the programme due to its success.
Systemic inequities within the financial system have impacted marginalized communities, including immigrants, for decades. When someone needs a car loan, so they can safely travel to their job but can’t access a car loan due to their undocumented status, they often fall victim to unfair financing and predatory lending. Helping people build prosperity through more inclusive banking services is at the core of Beneficial State Bank’s mission.
According to BankRate, nearly half (49%) of immigrants said a US credit card was hard to obtain. This can make building and improving credit a challenge, and can lead to wealth-building strategies, like buying a home, remaining out of reach for undocumented people, perpetuating the wealth gap for immigrant community members.
But creative and bold ideas can begin to move the needle when it comes to long-standing inequities in the financial system. In 2017, Beneficial State Bank began accepting Individual Taxpayer Identification Numbers (ITINs) for customers without Social Security numbers and have since expanded the programme due to its success.
Charles Elliott, SVP, Consumer Lending Manager at Beneficial State Bank:
“Our motto is to leave people better off than they were before finding us. The problem is simply that they don’t have a Social Security number or U.S. credit history. We are thrilled that our ITIN program has seen such success since its inception. Everyone deserves a fair shot at building wealth and prosperity, and we hope to move the needle in that direction.”
Better performance than standard loans
Finance and Thrift, a financial institution eventually acquired by Beneficial State Bank, first began lending to undocumented immigrants through furniture loans by partnering with furniture stores. When the data began showing that these loans outperformed other loans – meaning they were being paid off, with few charge offs – the bank decided to scale its ITIN lending program in 2017, providing auto loans and credit cards to those who weren’t being approved elsewhere, supporting them with credit building and the purchasing of safe and reliable vehicles.
The first year that Beneficial State Bank began accepting ITINs for auto loans and credit cards they made USD 100,000 in loans. The programme has since expanded every year. In 2022, the bank had USD 33.69 million in outstanding auto loans to 1,247 ITIN borrowers, and growth has continued throughout 2023.
When California passed its AB60 bill which allowed undocumented immigrants to apply for driver’s licenses (and then Oregon and Washington passed similar bills), Beneficial State Bank was able to grow its ITIN auto lending program even further.
Today, ITIN loans make up about 13% of Beneficial State Bank’s auto loan portfolio, which have consistently performed better than standard loans, with fewer charge offs. The auto loan program offers fair rates, and in 2022, clients who refinanced their auto loans with Beneficial State Bank reduced their interest rates by an average of around 9%.
