GreenState lending program helping hundreds of immigrant entrepreneurs

As GreenState Credit Union’s vice president/bilingual business director, Kenia Calderon Ceron launched an ITIN loan program designed to extend its services to immigrant entrepreneurs.

An ITIN, or Individual Taxpayer Identification Number, issued by the Internal Revenue Service (IRS) and initially created to help immigrants file taxes, helps people access credit at financial institutions, even when they don’t have a Social Security number.

“Right now we have a lending model, across the United States, where most people think you need a Social Security number or a driver’s license to be able to open a bank account," said Ms. Ceron. “But credit unions are allowed to open bank accounts for people that have foreign unexpired valid foreign ID.”

Examples of valid ID include a passport, consulate card and utilizing an ITIN number.

These loan programs, which have existed for several decades, are particularly useful for immigrant entrepreneurs that could use extra access to funds.

Born and raised in El Salvador, Ms. Ceron has seen the benefits of ITIN lending in the last 18 years as an Iowa resident, first as a client relations director at Coopera Consulting, and now with GreenState since March 2021.

In the program’s first year, GreenState opened about 200 accounts. That number doubled in 2022.

According to a report from The National Association of Hispanic Real Estate Professionals, 13% of small businesses are Latino-owned, and Latinos are 1.7 times more likely to start a business than any other demographic group. Latinos have also held the highest labor force participation rate of any demographic group in the last two decades.

“They’re really doing it with zero to little financial resources,” said Ms. Ceron. “When our families move to the United States, we just bring an entrepreneurial spirit. We have people that may have anywhere from a third grade education to folks … with law degrees, but since none of that really matters when you migrate to the country, you're tasked with starting your life over and being your own boss.”

While the program is beneficial for GreenState’s bottom line, it’s advantageous for individuals who don’t realize the options at their disposal. And it allows GreenState to reach individuals that may never have considered transacting with the credit union.

An estimated 4.5% of U.S. households, or 5.9 million people, were “unbanked” in 2021, according to a report from the Federal Deposit Insurance Corporation (FDIC). This means nearly six million people do not have a bank or credit union account.

“Having a program like this helps us reach mixed-status families,” Ms. Ceron explained. “Think of a Latino household. In a Latino household, you might have half of the people who are living there be U.S. citizens and the other half who are not, so having this program has helped include everyone that lives in a house."

On average, Latinos born in the U.S. earn almost 15% more than immigrants born in another country.

Around 4,700 Latino-owned businesses generate approximately $1.1 billion in annual revenue in Iowa alone. By 2050, the Latino population is expected to double to 408,000 residents, making up 12% of the state’s population, according to a study from the Iowa Latinx Project.

In Des Moines alone, there are an estimated 1,500 Latino-owned businesses generating $159 million in sales in the metro area, said Ms. Ceron.

“We worked internally to make sure that our policies and procedures were compliant and also inclusive…now we can offer anything from a checking account to a mortgage, as long as we can prove their identity and also assess their creditworthiness," she added.

The process itself, not unlike any Iowan opening a checking account under normal circumstances, is simple. That simplicity and inclusivity goes a long way into casting aside skepticism that immigrants may feel toward big financial institutions. 

“Depending on the country of origin for an immigrant or refugee, they might come from a country where banks and credit unions are not insured,” she explained. “In the past, banks or credit unions may have gotten in trouble or just broken trust with them.”

A lack of trust toward institutions was the second most common answer in the FDIC survey, behind not having enough money to open an account as the main reason for remaining unbanked.

Ms. Ceron noted that new citizens to the country can’t be expected to know that they could potentially have access to lines of credit if they aren’t even told about all services that a credit union can provide.

“There's an education that needs to happen for people who are new to the country, for them to understand the U.S. banking system is heavily regulated, we are insured and that it's not going to be the same as what they experienced back home in their country of origin,” Ms. Ceron said.

She said there are likely 65,000 immigrants that can benefit from the ITIN lending program in Iowa.