MADISON, Wis.–An Implementation Guide for Individual Taxpayer Identification Number (ITIN) Lending that was piloted by the Filene Research Institute is now available for financial institutions to provide access to loans for consumers that may not traditionally have access to these services.
In introducing the Guide, Filene noted that for a large segment of the U.S. population without a Social Security number, access to vital financial resources or being able to build credit has been “historically difficult,” even though at the same time, both banks and credit unions have been seeking “new and sustainable points of differentiation and sources of revenue.”
“The potential to serve entire diverse, vulnerable communities and sustain a credit union’s bottom line was not only reflected in our research and incubation testing, but also echoed through the words of the individuals benefiting from the service,” said Filene CEO Mark Meyer in a statement. “This guide removes the barriers to entry and will enable growth and financial security for all stakeholders – a true win-win situation.”
Where Program Was Tested
Filene said the ITIN Lending Program tested through its Reaching Minority Households Incubator has proven successful for both the credit union and the individual receiving the loan. The ITIN Lending Implementation Guide was built as an actionable resource to enable replication and rapid scale among financial institutions far beyond the testing group, Filene said.
According to Filene, results from surveys conducted during testing showed that 97% of participants would recommend the loan program to family and friends, 96% would use ITIN lending again if the need arose, and 95% said the program had a positive impact on their lives.
‘Comprehensive Strategy’
“Time and again it is evident that having a comprehensive strategy to understand, reach and serve Hispanic consumers bolsters your credit union’s bottom line and brings new members,” said Víctor Miguel Corro, CEO of Coopera – a consulting firm on providing financial products and services for Hispanic consumers. “So, it makes a lot of sense from the philosophical and financial standpoints to provide access to financial services to one of the most underserved constituencies in the United States.”
Coopera Plays Big Role
Filene said Coopera was a major collaborator in the research study and implementation guide.
“Inclusiveness has always been important to the credit union industry,” followed Miriam De Dios Woodward, CEO of PolicyWorks, which worked in partnership with Coopera in the development of the guide. “It is possible to support diverse and inclusive lending services such as ITIN lending in a compliant way.”
Filene said the guide consolidates best practices, tools, and resources from credit unions and other stakeholders that have refined ITIN lending over many years and are committed to serving the underserved.
“Financial inclusion is not only about recognizing the need to serve the underserved,” said Cathie Mahon, president and CEO of Inclusiv, the new name for the former National Federation of CDCUs. “It is about credit unions putting the practices and policies in place to ensure that all people, no matter their status, can have access to safe and affordable products and services. Inclusiv is excited to partner with Filene, Coopera and PolicyWorks in informing and advancing the industry in pursuit of greater financial inclusion for all people.”