Dreamer Loan Programs: Partnerships with Community Development Credit Unions
This study by Grantmakers Concerned with Immigrants and Refugees (GCIR) takes a close look at the characteristics of loan programs offered to Dreamers — children falling into the Deferred Action for Childhood Arrivals (DACA) law enacted in 2012.
DACA provided an estimated 2.1 million undocumented immigrants both temporary relief from deportation and the opportunity to obtain work authorization. However, for many potential applicants, the $465 application fee was an significant barrier to accessing the program’s benefits. In response, community development credit unions (CDCUs) — individually and in partnership with philanthropic foundations and immigrant-serving organizations— launched micro-loan programs to help immigrants pay DACA application fees while also introducing them to mainstream financial services.
For example, one in three immigrant households does not have a checking account, according to the GCIR report. As a result, many immigrants rely on predatory and payday lenders, while others do not interact with mainstream institutions due to lack of English language skills or awareness of existing services. Notes the GCIR report: "immigrants pay an estimated $2 billion each year in fees for check-cashing services, which most credit unions and banks offer for free."
To help philanthropy understand funding opportunities in this sector, this report provides an overview of five Dreamer Loan programs and outlines ways that foundations can partner with community development credit unions (CDCUs) to increase assets and economic mobility for low-income individuals and communities.