Banking Rights for Immigrants

Banking as a newcomer to a country can be an incredibly overwhelming endeavor. Despite being a nation founded on immigrants, the United States can make things difficult for both documented and undocumented immigrants to succeed. Luckily, immigrants—including those without documents—have most of the same rights as U.S. citizens when it comes to banking. 

Overcoming Cultural Barriers to Banking

Depending on the culture you are coming from, banking through a big bank may not have a very good reputation. You may not feel comfortable putting your money in a bank if banks are insecure in your country.

Fortunately, in the U.S., we have the Federal Deposit Insurance Corp. (FDIC), which insures deposits up to $250,000 per account at member banks. This means that if you choose to bank at an institution that is FDIC-insured, even if the bank becomes insolvent, burns down, or the area you are in experiences a natural disaster or civil unrest, up to $250,000 of your money is insured and will be paid out to you. When looking for a bank, make sure that you verify the bank you choose is FDIC-insured (or, if you choose a credit union, insured by the National Credit Union Administration [NCUA]).

Using banks in the U.S. can help start you on the path to building credit, and it gives you the ability to access and use your money more efficiently by avoiding check cashing fees, prepaid debit card fees, etc. Having a banking history can help you be approved in the future for loans like a business loan or mortgage.

Keeping your money in a bank is also more secure than alternatives. If your money is in a bank, then you can’t lose it in a fire or have it stolen if you’re keeping it in cash. If you have entrusted it to a friend or a sou-sou group, they can’t run off with it or have it stolen from them if it’s already safe in a bank account that you own.

Banking as a Documented Immigrant

Every bank and credit union has its own documentation requirements. The important thing to remember is that banks are not allowed to discriminate on the basis of your national origin. Antidiscrimination laws require them to follow the same documentation requirements for everyone. However, creditors like banks may consider immigration status and whether you have the right to stay in the country long enough to repay any potential debt when making their credit decisions.

To open a bank account in the United States, you will need to provide an identification number like a Social Security number (SSN) and a valid identity document like a driver’s license, passport, or green card. Some banks may also ask you to verify your address, which can usually be done with a driver’s license, lease, or utility bill.

Banking as an Undocumented Immigrant

Contrary to prevailing opinions and fears, immigrants who are not residents or U.S. citizens do have banking rights and can open bank accounts. Banks are not supposed to ask about your immigration status.

To open an account, you’ll need to have a legal form of ID, such as a foreign passport or a Matrícula Consular card, and you will need to either have a Social Security number or an Individual Taxpayer Identification Number (ITIN). Getting a valid Social Security number as an undocumented immigrant can be difficult, but the ITIN process is relatively simple.

Getting an ITIN

To get an ITIN, individuals will need to do the following and submit it to the Internal Revenue Service (IRS):

1. Fill out Form W-7
2. Provide an unexpired document that verifies your identity, such as a foreign passport 
3. Provide documentation that proves your connection to a foreign country, such as a foreign passport
4. Complete a federal tax return
   

The Bottom Line

Banking keeps money more secure and opens up more opportunities down the road. Banks cannot refuse to open an account or charge higher fees to immigrants whether they are documented or not. Know your rights before going to a lender, and file a complaint if you feel that they are being discriminatory.