Latinos launch bank to meet growing wealth needs

[Elizabethnhenry 0]

Latinos launch bank to meet growing wealth needs

Sun Jun 4, 2006 6:02 PM ET

By Mary Milliken

LOS ANGELES (Reuters) - Financial services for Latinos may mean money wires and store credit to many, but a group of wealthy Latinos says it is time to take banking for their fast-growing community to a more sophisticated level.

Together with non-Latino investors they will soon launch Promerica Bank, the first Latino bank in 35 years in California, home to America's largest Hispanic population and a powerful magnet for immigrants from south of the border.

The bank's creation coincides with a rise in Latino power, as an increasingly entrepreneurial and educated Latino community aims to prove its worth amid calls for a crackdown on immigration, mostly from Latin America.

But Promerica Chairman Maria Contreras-Sweet began thinking about the lack of Latino banks some years ago when she was California's secretary for business, transportation and housing and responsible for banking regulation.

"There are about 40 Asian banks operating in California, and it occurred to me, Why don't we have more Latino banks operating in California when you look at the population?," she told Reuters.

The last census in 2000 showed one-third of California's 34 million people are of Hispanic origin, compared with 12 percent nationwide. Los Angeles, which has a Latino mayor, has the largest Mexican population in the world after Mexico City.

When she left office, Contreras-Sweet convinced fellow leading Latinos, like Henry Cisneros, the former U.S. secretary of housing under Bill Clinton, to get on board for the long bank incorporation process.

"Lo and behold, when we submitted the application, we were told we were the first Latino de novo in 35 years," said Contreras-Sweet, who was born in Mexico.

The investors, called "organizers", now number 27 and range from Southern California real estate tycoon Ed Roski, who is not Latino, to Cuban-born music entrepreneur Rodri Rodriguez, famous for the Los Angeles mariachi festival.

With capitalization of $20 million and two branches in the Los Angeles area, Promerica will open in three months and focus on Latino family businesses with annual revenue of $1 million to $10 million. Working capital and real estate loans will be key products at the outset.

While many of the big banks do have some sort of strategy for tapping the Latino market, Promerica's backers say they lack the inside track on how local Latino business works.

"Most of the loan approval mechanisms for banks are back East and those that are approving those loans have little to no knowledge on the community structure or the habits of Latino entrepreneurship in Southern California," said Rodriguez.

"Many don't know that...the fastest growing segment of small business owners in California is Latino," she added.

UNDERSERVED COMMUNITY

Successful Latinos complain that the non-Latino business world has underestimated and underserved a consumer group that will spend some $1 trillion nationwide by next year.

"It is one of the last massive market inefficiencies in the American economy," said Fernando Espuelas, who emigrated from Uruguay as a boy and is chairman of media company VOY.

Espuelas wants to improve access for the young Latino population to financial services. VOY, which means "I go" in Spanish, recently signed a deal with the School Loans Corporation (SLC)to launch a bilingual loan service "by Latinos, for Latinos."

"I personally believe this is a very significant market for us," said Maurice Salter, CEO and president of SLC. He cites a forecast that Latinos will account for 18 percent of university enrollment in 2010, up from 8 percent a decade earlier.

Inroads in higher education, like those made by Asians in the last decades, will be key for Latinos to take better financial care of their community.

"I want this to be authentic," said Contreras-Sweet. "If we are going to have a bank that services the Latino community, we ought to have people that understand it and can service it with more insight into what those nuances are."

But she insists that Promerica does not seek to be exclusively for Latinos and should promote integration with other communities rather than put up barriers.

"It is not our intent to separate the community, but rather integrate it in society," she said.

http://today.reuters.com/News/newsArticle....URE-LATINOS.xml

[w¡n9Nµ7 §£@¥€r 123]

Yes, I've seen the Asian and Indian banks in my area. I've read their pamphlets and they do exactly what Bank of America and HSBC do. What's the difference, isn't a bank a bank? Once again, I don't get it.

[pedroh 21]

true.. soon enough the spending power of the latino community will be over $998 billion dollars.. now it's a good time to start getting that piece of 'pastel'

also the difference are.. u go to a bank, wachovia for example (i went there), and even if u speak english.. the requirements due to 'patriot act' are a lot, and worthless imho.. it's a pain to bank.. besides most of the banks don't care bout spanish speaking customers.. who btw have their money under the couches lol... they don't trust banks cuz a) they dont speak spanish B) they ask for a ton of fukcin paperwork...

[AnaAndDaniel 0]

Yes, I've seen the Asian and Indian banks in my area. I've read their pamphlets and they do exactly what Bank of America and HSBC do. What's the difference, isn't a bank a bank? Once again, I don't get it.

the way i see it, it is a group of ppl who want to get into the business and see an opportunity. The y think they have some marketing diferential, ie. they are hispanic and that somehow that translates into a strong draw for hispanic clients.

Daniel

:energetic:

[w¡n9Nµ7 §£@¥€r 123]

Got it. The language/culture thing is definitely a plus for many customers. Even those who speak fluent English may simply prefer to deal with people who are "like them" because it's more comfortable. Good point.

[usarandyo 0]

Agent Smith....

fact of the matter is they are pilfering the United States of it's wealth. Where do you think the money they obtain here goes? Some, of course, goes back into the business but the rest? Back to their country of origin!

Do the math!

[gtigiant 0]

i know that some of the largest banks in the US have their largest new customer focus on the hispanic community, inlcuding a large percentage of their marketing. there is a reason for that

my fiance was worried about the ease of finding a job when she gets to the US. I laughed when she expressed this concern. I told her, "you speak english and spanish without issue, once you have your EAD you basically pick what company you want to work for"

[choji 0]

I changed banks because I do NOT speak Spanish (at least not on a fluent level) and had a lot of problems with the hardly English speaking employees. This change happend in the course of one year, because when I opened my account, there were enough people around who did speak good English.

I am perfectly fine with bank clerks being multilingual. Good for them. But for me to learn Spanish to be able to conduct my bank business? Not in a country where the nonofficial "official" language is English.

[Mr. Big Dog 10,747]

I changed banks because I do NOT speak Spanish (at least not on a fluent level) and had a lot of problems with the hardly English speaking employees. This change happend in the course of one year, because when I opened my account, there were enough people around who did speak good English.

Maybe changing the branch (going to the one in the not-so-hispanic neighborhood) would have done the trick for you.

[choji 0]

I changed banks because I do NOT speak Spanish (at least not on a fluent level) and had a lot of problems with the hardly English speaking employees. This change happend in the course of one year, because when I opened my account, there were enough people around who did speak good English.

Maybe changing the branch (going to the one in the not-so-hispanic neighborhood) would have done the trick for you.

One might think so. However, as you are well aware, there are already banks who specialise heavily in Spanish speaking clientel, and this was one of them. I had to change banks, which after all was not such a big deal anyway (and my new bank is just across the street - added bonus).

Not to be misunderstood on this subject: whoever I deal with is more than welcome to speak more than one language, after all, I do too. I just find it slightly strange - up to the point of being really miffed - that as a speaker of English I am suddenly in a position of not understanding a bank clerk in a country where the majority of people speak English.

Or they should put up a large sign saying "Non habla Inglese". (I pointed it out before, my Spanish is wobbly. ) Then I know right from the beginning that this institution is not for me.

On the other hand, I do not at all expect for example people who run a small Mexican/Korean/Japanese/Cuban/Polish and what have you restaurant to speak English. They cater for a certain clientel, and I am aware of that. When I go to such places, I know that I might encounter certain language difficulties, but all that is a stake here is that I might end up eating something I am not quite sure of what it might be. That all adds to the fun, and is always a nice adventure.

With my bank, however, my sense of adventure is rather underdeveloped. Here I want to understand and be understood. In English.

Otherwise - as pointed out already - please put up the sign saying that one does not want my business because my language abilities are not fitting the customer profile.