September 5, 2017 Personal Finance

5 financial moves DREAMers should make now

A program granting legal protections to undocumented immigrants who were brought to the United States as children is coming to an end, but their financial questions are likely only now just beginning.

President Trump on Tuesday said his administration would wind down Deferred Action for Childhood Arrivals (DACA), implemented by the Obama administration. The president gave Congress six months to come up with a legislative fix to replace the program, which shields roughly 800,000 young people from deportation and allows them to work legally in the U.S.

“I do not favor punishing children, most of whom are now adults, for the actions of their parents,” Trump said in a written statement. “But we must also recognize that we are (a) nation of opportunity because we are a nation of laws.”

If you’re one of the so-called DREAMers — named after a 2001 bill that never became law, the Development, Relief, and Education for Alien Minors (DREAM) Act —  you have some decisions to make soon about your bank accounts, credit cards and mortgages.

With all the uncertainty, including Congress’ ability to come up with a permanent solution by March 5, 2018, here are five things DREAMers should do now to protect their finances.

No knee-jerk reactions

For the 61 percent of DREAMers who, according to research conducted by American Progress, opened a bank account after receiving DACA protections, your best course of action starts with keeping the status quo. Your legal status may change, but your financial obligations will remain.

Don’t close your savings account. You might find comfort in having more cash on hand, but the safest place for your money is in the bank. Leave it there.

Although you may not face deportation for half a year or longer if Congress provides no legislative relief, you may consider checking with your bank on its specific policies for managing an account from outside the U.S.

Learn about ATM foreign transaction fees, adding a person to your account (to help manage it in your absence), closing your account and transferring your account to a foreign bank. It never hurts to know how things might work, just in case.

Be smart about your money

Nearly two-thirds of these young adults have purchased a car and own credit cards. And nearly a quarter of those over the age of 25 have bought a home.

Continue to pay your bills. Your credit history doesn’t care about your legal status. If you fall behind on payments, it will damage your credit, making it more difficult to buy a home or apply for a credit card in the future.

While a number of large employers have come out strongly in support of DACA, your job isn’t safe if some form of the program isn’t renewed. Although your employer can’t legally fire you or change your work status if you have a work permit, you will only be legally allowed to work until your permit expires.

If your job is jeopardized, it is important to communicate with your credit card companies, mortgage lenders and other debt holders about your employment situation. They might be willing to work out payment arrangements with you, but communication is key.

And don’t be afraid to negotiate the terms, says Annette LoVoi, director of financial access and asset building for Appleseed, a network of public justice nonprofits.

“This is no time to be reticent,” LoVoi says. “Reach out to your institutions to discuss your finances and see if you can adjust the terms to fit your income and circumstances.”

Take stock

Plan for the unexpected. Appleseed has published an extensive guide on what people facing deportation and those helping them should do. One of the tips involves cataloguing accounts.

Although you might have this information memorized, it is a good idea to get it down on paper.

In the case of your credit cards, Appleseed suggests writing down the card name, the issuing bank, account number, security code, date of expiration and contact information for the company.

You should take a similar approach for all other financial accounts, too, including debit cards, prepaid cards, private student loans and 401(k)s, if you participated in your company’s program.

Finally, make sure to store this sensitive information in a secure place where only you and anyone helping you can find it.

It is important to document this all because it is yours regardless of your immigration status.

“The plan is to have a plan,” LaVoi says. “What you’ve worked for — both in your education and assets — are yours.”

Find someone you trust

Once you’ve created a list of your accounts, you may want to designate someone you trust to take care of your financial responsibilities should you be unable to.

The Appleseed guide suggests considering a limited or financial power of attorney.

This is a big deal, because you’re essentially giving someone legal authority to act on your behalf with your money. You’ll need to pick someone you trust and someone who is capable of fulfilling the role you need them to play.

If you’re not quite ready to surrender all that power to someone, you can opt for a “springing” power of attorney, which has a triggering event. For instance, you could create one that says this person has the financial power of attorney if you’re detained.

Not all institutions accept such arrangements, according to Appleseed, so check with your bank first.

Mind your Social Security number

If you received a Social Security number under DACA — one of the program’s benefits for eligible workers — it’s yours to keep regardless of your future immigration status, according to the Immigration Legal Resource Center.

You may continue to use your SSN for financial transactions.

From a banking perspective, you don’t need a Social Security number to get access. Banking laws require institutions to collect your name, date of birth, address and an identification number. That ID number is often a Social Security number, but it is not exclusively one.

Those who do not have a Social Security number often turn to an Individual Taxpayer Identification Number from the Internal Revenue Service to verify their identity. As you might expect, you have to have filed a valid federal income tax return in order to obtain one.

ID cards offered by municipalities and consulates are also accepted by some banks.