California is home to about 10 million immigrants with nearly $210 billion in spending power. This makes them a critical consumer group, but one that remains unprotected from fraudulent financial practices.
Barriers in federal rules and distrust of banks among immigrants keep consumer protection out of their reach.
Large swaths of the immigrant community remain unbanked, using products and services that tend to increase their debt rather than help them build wealth. Technology compounds the problem by allowing consumers to waive protections, perhaps unknowingly, with a mouse click or swipe.
Vague laws also allow a semi-underground industry of notarios, people who illegally practice immigration law to flourish, taking immigrants’ hard-earned money and even leaving them exposed to deportation. This despite clear guidance from the federal government on who can represent people in immigration court and how they should do it. From December 2018 to June 2019, complaints about these illegal practitioners doubled.
CHIRLA moved into this policy area to push for laws that strengthen consumer protections, more stringently regulate the financial service industry, and create safe and affordable financial products for immigrants.
CHIRLA’s Consumer Bottom Line
These principles guide CHIRLA’s advocacy on behalf of immigrant consumers:
- Immigrants must have the same protections as other consumers, but with additional safeguards to account for their unique challenges
- Financial contracts and transactions must be transparent and in the clients’ preferred language to ensure thorough understanding of terms.
- Legal remedies should exist to mitigate fraud
- Remedies should include a grace period allowing consumers to rescind a contract
- Remove barriers in banks and credit unions’ business models to let immigrants become fully financially literate
Our Wins for Consumers
- SB 33 (Dodd): Arbitration agreement limits, passed 2017
- AB 539 (Limon): Rate caps on predatory loans, passed in 2019
- AJR 48 (Limon): Fair Consumer Protections for All Act, passed in 2018
- SB 455 (Bradford): Financial empowerment fund, passed in 2019