Ruben Torres recently walked into the St. Andrews Center to ask about the assistance organization La Paz de Dios, but instead he got information about how to open a bank account.
“I’m not sure if I want to open a bank account or not,” said the Mexico native outside the Holston Methodist Federal Credit Union, which is housed in the same former church building as St. Andrews.
“I’m not 100 percent sure the bank, because it’s so small, will not suddenly disappear and I’ll lose my money,” he said, speaking in Spanish.
The distrust many Hispanics have toward financial institutions is the main challenge banks and credit unions have when reaching out to that segment of the population, officials agree.
* By 2010, the U.S. will be home to 50 million Hispanics, who will command buying power in excess of $1 trillion.
* Roughly 56 percent of U.S. Latinos now are “unbanked.”
* Many industry analysts believe more than half of all U.S. retail banking growth in financial services during the next two decades will originate from the growing Hispanic market.
* The longer Hispanics and their families have been in the United States, the more likely they are to use mainstream financial services.
Source: The Hispanic Market: Changing Patterns of Untapped Growth by Information Technology, 2007
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“Hispanics have historically eluded traditional financial institutions for reasons including fear, lack of education and accessibility,” said Hamilton County Extension Agent June Puett. “They are more likely to be ‘unbanked’ than any other ethnic group.”
Hispanics also have been particularly vulnerable to being robbed because they often carry large amounts of money with them or keep it in their homes, said Mike Feely, director of the St. Andrews Center, a resource for Chattanooga’s multicultural communities.
Home invasions and burglaries against Hispanics have decreased in the past year, said Sgt. Rebecca Shelton, with the property and crimes division of the Chattanooga Police Department. She attributed the drop mainly to education initiatives and greater awareness in the Hispanic community.
About four years ago, Primer Banco Seguro opened in Dalton, Ga., specifically to serve the Hispanic community, bank Vice President Dora Wilborn said. Primer Banco Seguro is affiliated with Dalton Whitfield Bank and a division of FSG Bank in Chattanooga.
“FSG Bank saw the necessity to open a Hispanic bank because there were so many Hispanic workers. The community had grown,” Ms. Wilborn said.
But at the beginning it was all about trust, she said.
“We had a lot of people coming in but asking us if it was like in their country, that here the (banks) are here a minute and the next minute they are gone,” she said. “It was a matter of reassuring them we were a legitimate bank and the trust is here now.”
Building trust between the community and financial institutions is one of the main priorities of those working with Hispanics, financial officials say.
“We want them to trust financial institutions so they will feel comfortable coming to our credit union and eventually to other institutions,” said Stacy Johnson, Hispanic member development director with the Holston Methodist Federal Credit Union.
From June 2007 through the end of October 2008, the credit union opened 191 accounts, most for Hispanic clients, Mrs. Johnson said.
But the increase of Hispanic clients at other banks has not been as dramatic, said Keith Sanford, executive vice president with First Tennessee Bank.
“We don’t see astronomical increases in accounts, but we have seen increases, particularly as agencies like La Paz are spreading the word, trying to build more confidence in banks and other institutions,” Mr. Sanford said.
About five years ago, First Tennessee began offering Spanish classes for its employees, providing information in Spanish and hiring bilingual staff, he said. The bank doesn’t keep data on bank accounts broken down by ethnicity, he said.
But events such as the raid at the Pilgrim’s Pride chicken processing plant in April, which resulted in the arrest of 100 workers suspected of being in the country illegally, have been a setback for a lot of institutions, Mr. Sanford said.
“When the raid happened, a lot of our Hispanic customers kind of almost went underground for a few weeks,” he said. “They really lost a lot of trust in our institutions. Now it has calmed down again and evened out.”
Ms. Puett said financial institutions and the community should encourage Hispanics to open accounts “for safety, convenience and to save for long-term goals such as buying a home and education.”
Mr. Torres said he plans to return to the credit union this week and perhaps make the decision to open an account.
“I know that, at the end, it’s the safest way for me to keep my money,” he said.
Perla Trevizo joined the Chattanooga Times Free Press in 2007 and covers immigration/diversity issues and higher education. She holds a master’s degree in newswire journalism from Universidad Rey Juan Carlos in Madrid, Spain, and a bachelor’s degree in political science from the University of Texas. In 2011 she participated in the Bringing Home the World international reporting fellowship program sponsored by the International Center for Journalists, producing a series on Guatemalan immigrants for which she ...