Inclusive Economy | June 7, 2022

One Percent for America: How simple, low-cost loans can clear a barrier to citizenship

David Bank
ImpactAlpha Editor

David Bank

Those newly naturalized Americans in the stirring pictures of immigrants from all over the world taking the Oath of Citizenship – every one of them paid a fee. 

The U.S. Citizenship and Immigration Services, part of the Department of Homeland Security, runs on user fees, not tax dollars. Eligible immigrants seeking to become citizens must pay between $400 to $1,200. At least partly as a result, as many as 90% of the nine million eligible immigrants each year never apply for naturalization. Many that do take out high-interest loans or run up credit-card debt.

A new flexible, unsecured, 1% loan, specifically to cover such naturalization fees represents a modest, simple and practical fix to unclog the immigration pipeline and enhance livelihoods, says BlueHub Capital’s Elyse Cherry. BlueHub last week launched such a loan portal, dubbed One Percent for America, and has already made more than 70 loans. The name intentionally inverts the now-common meaning of “the 1%.” 

“Everybody benefits when immigrants are given a fair shot to become citizens,” says Cherry, who has led BlueHub, formerly known as Boston Community Capital, since 1997. The One Percent campaign uses imagery of Lady Liberty’s torch to evoke Emma Lazarus and America’s immigrant ethos.

“It really is an effort to move away from the divisiveness that has characterized the country and say, ‘This is a place where most of us agree,’” Cherry tells ImpactAlpha. “Let’s just leave the rest of it aside and make this happen.”

Immigrant marketplace

The nonprofit community development finance organization launched the loan program from its own balance sheet and is also enabling other lenders, even with as little as $25, to participate. Most earlier solutions relied on donations and “there aren’t enough grant dollars,” Cherry says. 

The small loans have to be as close to cost-free as possible. A simple online application requires only a bank account and Social Security or taxpayer number. There’s no underwriting and no credit scoring. Because checks are made out to the Citizen and Immigration Service, they can’t be used for other purposes. Names are checked against the watch list of the Office of Foreign Assets Control. 

“We think we will get very good payback on this even though it’s unsecured,” Cherry says. Most loans should get paid back in about a year, but there are no late fees or penalties for missing a payment. Longer-term, borrowing circles can reinforce peer pressure, Cherry says. “We think that folks who are in the process of applying for citizenship are going to be particularly diligent about paying back.

Cherry says the One Percent borrowers represent an attractive market for businesses in financial services, hospitality and education eager to reach an underserved and upwardly mobile population. “We’re hoping to build out a very large community here.”