Although new comprehensive immigration reform has not yet been passed, many banks are now offering financial services to immigrants, including the undocumented. This trend is believed to be a positive effect of the free market economy, aiming to meet the demand for goods and services.

Banks have begun to offer credit cards, small loans and mortgage loans to undocumented immigrants. In fact, some financial institutions, especially ethnic credit unions, have been offering financial services to undocumented immigrants for years now. While waiting for an opportunity to legalize their status, undocumented immigrants could slowly begin to work on their American Dream.

According to the findings of the Center for Immigration Studies, about half million illegal immigrants and an additional million legal permanent residents cross the U.S. borders annually.

Most of the undocumented immigrants, the Center for Immigration Studies added, work hard and pay their taxes with Social Security numbers or Individual Taxpayer Identification Numbers (ITIN), building arduously their credit history. But their access to financial services is much more limited than for those who have lived in United States for longer years.

Lack of credit history is the reason why banks are reluctant to grant loans for undocumented immigrants; however, this trend is slowly starting to change. The saturation of the market with financial services is so great that financial institutions started to turn towards market niches that have been seen as not worth attention, until recently. Both groups of immigrants – documented and undocumented – are benefiting from this shift. Recognition of their needs by the market of financial services will expedite the advancement of newly arrived immigrants.

Understandably, financial institutions charge more for lending money to undocumented immigrants given their risk of deportation; however, the percentage of so called “bad credits” among immigrants is not higher than the national average, which means that the added risk premium may soon start to decrease. Once the more established financial institutions start offering services to undocumented immigrants, the risk of usury or other types of abuse related to granting loans to people who haven’t legalized their status in the United States will decrease.

The free market economy responds to economic realities and not to the state of legislation. Because there are more than 12 million undocumented immigrants in the United States, and there is no way to solve the immigration problem in this country overnight, their needs shouldn’t be ignored. For this reason, the number of reputable institutions, and not just smaller firms, which aim to meet the emerging demand, has begun to increase dramatically. As a result, not only does the free market help immigrants to assimilate faster, but by offering services to this group of U.S. residents, regardless of their status, it also boosts the development of the largest economy in the world.