Learning to trust the bank | A new program teaches financial literacy to Portland's refugee communities
There was no bank in the Somali village where Yussuf Yussuf and his family lived before war drove them from their home in 1996. There were no debit cards, checking accounts or ATMs in the Kenyan refugee camp that Yussuf's family called home for the next nine years. Yussuf lived in a cash-based society, and the money he did have was safer within the four walls of his own home. "We keep [the money] in the house," Yussuf says. "In a box in the house only."
So when Yussuf, who is 45, arrived in Portland in 2005 with his wife and children, the family kept its money in its apartment. Yussuf cashed their general assistance checks at Shaw's, or at check-cashing stores that charge fees of as much as 2% of each paycheck cashed. Yussuf paid his rent and his bills in cash.
Yussuf, like the vast majority of refugees who arrive in the United States from central and eastern Africa, was not familiar with the American system of banking. Besides living in a cash-based society, many of these refugees come from war-ravaged areas like Somalia or the Darfur region of Sudan that have experienced breakdowns in civil society. For Yussuf and other new arrivals, the thought of a trusted banking system in such chaotic places is unimaginable, a belief that persists here in their new home.
Judy Carl is trying to change that. In December, Carl created the New Americans Education Center in Portland, part of a growing network of programs designed to help refugees and immigrants assimilate — except that few such programs go into much detail on bank statements, credit cards, and other staples of American financial life. Based on a 12-week course she began teaching last year under the umbrella of the African Culture and Learning Center, Carl's new program emphasizes language skills and cultural awareness for her students, most of whom are from the East and Central African countries of Somalia, Sudan, Ethiopia and Rwanda. But in addition to deciphering traffic signs and learning how to use a post office, Carl's students also learn financial literacy, American style.
Most students in her class, like Yussuf, who was a student in her first class of 18 students, haven't been in the country long enough to have set up bank accounts — but most eventually will, Carl says, which is one of the reasons KeyBank has partnered with Carl to help teach her students financial literacy. Last year, Carl approached Charlie Kennedy, v.p. of community development banking at KeyBank in Maine, about involving Key in the class. (Key funded the construction of the Parkside Neighborhood Center, where Carl teaches the class.) Kennedy jumped at the idea, but not just to promote KeyBank in front of potential customers. His primary reason, he says, was to further Key's community outreach. "Would I like to get some accounts out of it? Absolutely," he adds. "But I wouldn't consider it a failure if we opened no accounts."
Kennedy tapped Sandy Walsh, manager of KeyBank's Monument Square branch in Portland, to visit Carl's class for a two-day primer on banking. Walsh has since given the talk for other groups, such as Portland Adult Education and Catholic Charities. "[Financial literacy] is so important in this day and age," Walsh says, "because so much information is being thrown at people."
At the end of the class, students are brought to KeyBank's Monument Square branch for a tour and small reception. Yussuf couldn't make the tour, but his wife, Jamilo, did. The building itself made a lasting impression on her. "It was so beautiful," she says.
Banking on relationships
In banking, as in refugee communities, relationships are important. When refugees arrive in a place like Portland, others who have preceded them often help get them settled. They share their experiences and pass on their accumulated knowledge to help the recently arrived settle in.
That's how Louis Okeik, a refugee from southern Sudan and another of Carl's first batch of students, found himself opening a checking account at a Bank of America branch in Portland. A Sudanese friend had told him he needed to join a bank, and brought him to the branch to help translate. "I'm coming from Africa. I have no English. He say I'm going to Bank of America," says Okeik, who arrived in Portland with his wife, Jenti, in February 2006 after spending several years in a refugee camp in Egypt.
Okeik, sitting with his wife in their modest apartment in Portland, proudly displays his Bank of America ATM/debit card. But relationships are important to Okeik, and no one from Bank of America ever visited his classroom. "Next week, going to take money and take it to KeyBank," Okeik says. "It's good, KeyBank."
Banks generally get most of their business from referrals, says Walsh, and this fact seems especially true in refugee communities. "KeyBank knows it has to be involved in the community," Walsh says. "It's definitely a way to generate business."
Carl launched her classes because she saw a need in the newly arrived refugee community, especially among people from Africa. She says half the Somalis who arrive are illiterate or have no schooling. Many join classes at Portland Adult Education, but their fellow students are refugees or immigrants from places like Eastern Europe who often possess more English and cultural awareness than the Africans. "So [the Africans] get left behind and they never learn anything," Carl says.
The need is greater than ever, Carl says. In the 1980s, refugees received two months of orientation before being placed in the United States, she says. Today, because of budget cuts, Catholic Charities, the only organization in Maine that places refugees in the state, can provide just one day of orientation. "So when they get here they know nothing," Carl says. "What can you teach in one day?"
Problems can quickly arise. Refugees unfamiliar with credit cards, for instance, often fall into deep debt because they buy things on credit and pay the $20 monthly minimum, thinking they're paying off their purchase rather than just the interest, Carl says.
One of the things students take away from Carl's class, as Okeik illustrates, is an allegiance to KeyBank. Walsh says as many as 80% of the students in Carl's class end up as Key customers. Some of them join after the fact, as Okeik is planning to do, and some open accounts when they tour the Monument Square branch.
This is KeyBank's first venture into financial literacy training in Maine, but the bank has been involved with it elsewhere. In Cleveland, where Key is headquartered, a financial literacy classroom is built into one of the bank's branches. Key lists community involvement among the tenets of its mission, and has launched a more corporate-level initiative to reach people around the country who don't use banks, many of whom are refugees and immigrants. Those people spend nearly $11 billion every year in fees at check-cashing and wire-transfer operations, according to the Chicago-based Center for Financial Services Innovation. "New Americans are clearly an opportunity for the bank to open new accounts," Kennedy says.
Kennedy is always looking for opportunities to work with already established groups to teach financial literacy, but says in the future KeyBank may take the initiative. "I would not be surprised if down the road we convene our own class," Kennedy says. "We're not there yet, though."
Assimilation outweighs skepticism
At the beginning of the classes on financial literacy, Walsh begins by talking about privacy and trust. She warns the students that bankers ask a lot of questions.
Though one might expect refugees — especially those from places where the government is not to be trusted — would be wary of handing over their money to a bank, rather than putting it in a box under the bed, Walsh says the students aren't skeptical. "Their desire to assimilate outweighs any skepticism they might have," she says.
Walsh also builds upon the rapport Carl and the program's other teachers have created with the students. "They listen, because they know we're on their side in terms of trying to help them get a leg up," Carl says.
After her presentation on trust, Walsh explains the importance of saving money, and how banks can keep a person's money safe. The conversation is slow; interpreters in the class translate Walsh's comments into Arabic and Somali, which is often retranslated by students into Swahili, Belanda, or Zande for the benefit of other students. Walsh also sells KeyBank's services a bit, letting them know how easy it is to wire money through KeyBank to their home countries. Walsh says there are many questions "right out of the gate" about borrowing money, but she tries to steer the conversation back to the importance of saving.
But saving money could be a long way off for many of Carl's students. Right now, Yussuf has only a checking account at TD Banknorth, which happened to be the bank with a branch nearest his family's apartment in Portland. "I don't have money to save right now, but I think about it when I get money," he says in Somali as his 20-year-old daughter, Saharo, translates. "I don't want to put it in house, I want to put it in account. So when I get money, I'll put it in whatever is good."
Though an interest-bearing savings account would seem like the obvious choice for a would-be saver like Yussuf, the interest could cause a problem. In Islamic societies, interest — earning and paying — is forbidden, though there seems to be different interpretations of this. Some say that only usury, or excessive interest, is forbidden, but that common levels of interest, such as those on a car loan, are acceptable.
Walsh has dealt with devout Muslims who don't want to earn interest. To them, she suggests saving money in a free checking account, which doesn't earn interest. But she says the interest issue hasn't been a big one, and that most Muslims she's worked with don't have a problem with earning, or even paying, interest.
Yussuf doesn't like the idea of interest. "Charge interest not good for me," he says. When Yussuf wanted to buy a car, he borrowed money from a friend, which he finished paying off in January, without paying interest. He isn't thrilled about earning interest, either. "I just need mine," Yussuf says, referring to his money. "I don't need any more."
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