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New Americans Learn Financial Literacy


Published April 6, 2016 at 10:00 a.m.

Heather Davis - OLIVER PARINI
  • Oliver Parini
  • Heather Davis

Ten minutes before ending her financial education class, instructor Heather Davis played a recorded message on her cellphone. "This is an automated message from the Internal Revenue Service. There's a legal notice filed against you for tax evasion and tax fraud. So, before your case is registered into the Federal Claims courthouse and before you get arrested, call us at 305-260-6054."

Davis, associate director of the Financial Futures Program at the Champlain Valley Office of Economic Opportunity, waited as the interpreter described the contents of the phone scam to the Arabic-speaking audience.

"First of all, the IRS will never call you like that. You'd always get a letter from them," Davis informed the group of Iraqi refugees, most of whom have been living in Vermont for about two years. "The really terrible thing about this is, it's preying on people's potential fear."

The class was the second in a three-part Essential Money Skills course that CVOEO created for refugees. The human services agency has always accommodated those who need interpretation in its regular classes, Davis said. But last October, CVOEO received $20,500 from the Office of Refugee Resettlement and the Vermont Agency of Human Services to offer classes for refugees in their native languages.

"Most refugees have not used banks, and incomes for newcomers tend to be very limited," Davis said. "Learning how to understand the new systems, such as banking and credit, managing what they have, avoiding scams, and knowing how to access resources will help them to succeed."

While case managers from the Vermont Refugee Resettlement Program (a field office of the U.S. Committee for Refugees and Immigrants) and the Association of Africans Living in Vermont also talk about financial literacy with their clients, the classes at CVOEO offer more specific information, Davis said. Along with other service providers and faith-based groups, VRRP and AALV helped spread the word about the course.

Each month, CVOEO runs two three-class series conducted in languages including Burmese, Maay Maay, Karen, Kirundi, Lingala and Swahili. The organization's leadership hopes to serve 100 refugees by the end of September, Davis said. The agency has scheduled extra classes in Nepali to accommodate the local Bhutanese population, which is larger than that of other groups.

The classes are designed to give participants a grasp of basic concepts of the U.S. financial system. But Davis also takes particular needs — such as religious restrictions — into account when planning her curriculum. For example, she normally encourages participants to place money for emergencies in saving accounts. But such accounts are off-limits to Muslims, who cannot pay or receive interest, so Davis advises Muslim attendees to put aside their money in a second checking account.

Having lived in Vermont for about two years, the Iraqi participants in this session had a basic understanding of banking in the U.S., but they thirsted for more knowledge. "I want to learn more about credit," said Suaad Alsammraee, a 65-year-old Winooski resident. The Iraq she knew was a cash-based economy, she explained, in which only businesspeople, such as her husband, used banks.

Armed holdups were common in Alsammraee's homeland after the start of the war in 2003, and ATMs were nonexistent — Alsammraee learned to use them after she and her family fled to Syria in 2006. When the violence in that country escalated, they returned to Iraq. In November 2013, she and her husband were resettled in the U.S. One of her children now lives in this country; the other two are in Sweden and Denmark.

Essential Money Skills class - KYMELYA SARI
  • Kymelya Sari
  • Essential Money Skills class

Another class participant, Ahlam Al Attar, said she learned the vocabulary associated with banking during her English class at Vermont Adult Learning. Her case manager at VRRP covered the topic, too. The 56-year-old admitted that it was initially "strange to go out with nothing, just a card in the pocket," but she eventually got used to it.

Al Attar and her family fled to Syria in 2006. In 2013, when the conflict there worsened, they returned to Iraq. Together with her husband and 20-year-old daughter, she moved to Vermont two years later.

Al Attar said she once received a phone call claiming that President Barack Obama had gifted her daughter with $8,000. To receive the money, she was told, she had to make a payment of $200 via Western Union. When Al Attar called her brother-in-law in Pennsylvania for help, he laughed. "If Obama sent you money, it'll be a check, not through Western Union," she recalled him saying.

A chemical engineer in Iraq, Al Attar hasn't been able to find full-time employment because she continues to suffer the effects of a facial injury inflicted in Damascus by a sniper's bullet. She's been making use of her other skills — crocheting and sewing — to supplement the monthly food stamps she receives.

Though she doesn't foresee being able to put aside money for emergencies any time soon, Al Attar believes she's laying the foundation for success. Like Alsammraee, she wants to learn more about building a credit history. "I am thinking of buying a car [and] a house, plan for the future," Al Attar said.

Amila Merdzanovic, director of VRRP, said that credit is a looming priority for most refugees. Case managers and employment counselors talk to their clients about paying electricity and gas bills on time, because this helps establish a good credit history. "It's important to talk about it early on, 'cause we know if you mess up your credit history, it takes a lot to get it fixed," Merdzanovic said.

Without a good credit score or history, it can be difficult to make large purchases, such as a car or house, or to obtain employment, education or insurance. For refugees, the first step toward building a credit score is to repay their interest-free loans from the International Organization for Migration, which they're given to cover the cost of airline tickets to the U.S.

"Everyone signs a promissory note before departing, agreeing to start making payments six months after arrival," Merdzanovic explained. "These are low monthly payments for a long period of time."

A single person who's employed may be able to pay off the loan within a year. A family of six or more will probably take longer, unless at least two adults are working. "Most people are not in that position," the VRRP director said.

While the CVOEO classes go a long way toward educating newly arrived refugees about U.S. financial institutions, goals such as purchasing a car or house still remain out of reach, even for many refugees with a more established presence. "We have a large Muslim population in Vermont," Merdzanovic noted, "and there are people who are ready to consider home ownership but are limited due to lack of access to [interest-free] loans."

VRRP case manager Abdirashid Hussein said that no one from the 3,000-strong Somali community in Vermont has been able to move out of public housing and purchase his or her own home. The availability of cheaper housing in upstate New York has enticed many Somalis to move, he added.

"Renting is expensive in Vermont, and one cannot live in a rental apartment for the rest of their lives," he said. "Many earn minimum wage and cannot afford to buy [in] cash."

When it comes to cars, most Somalis opt to buy brand-new vehicles from the 2015 and 2016 lines at Heritage Toyota Scion, because they can make interest-free installments over 60 months on certain models, Hussein said.

"I think one thing Vermont should look at is riba-free lending," said Merdzanovic, using the Arabic word for interest. "I know in some of the other states with larger Muslim populations, they have this option."

For now, though, Davis from CVOEO offers the newly arrived refugees the option of attending several cycles of the class to cement their understanding of the banking system. She also encourages them to make appointments at the agency to get help in creating a budget for their family and establishing good credit. "There are always new things to learn and reinforcing things you've already learned," Davis said.

While scammers and predatory lenders may see newcomers to the U.S. as easy prey, Davis and others like her work to bridge the information gap. "We'll say we don't understand English," said one student to explain why he wouldn't fall victim to such hoaxes, prompting laughter from others. But Davis was still cautious. "If you're unsure, don't make any agreement," she told the attendees. "You can always come talk to us here, and we can help you assess what's going on."

The original print version of this article was headlined "Money Matters"