Bankers target Hispanic residents for greater financial inclusion

Bankers in northern Nevada say they are making strides toward proving greater financial inclusion for unbanked and underbanked residents of Reno-Sparks, particularly those of Hispanic origins.

A 2011 study by the FDIC on the unbanked and underbanked consumers found 20 percent of Hispanic households in the United States are unbanked, while another 28 percent are underbanked. Nearly 15 percent of the nation’s Hispanic population has never had a checking or savings account.

Unbanked households lack any kind of deposit account at an insured financial institution. Underbanked households hold a bank account but also rely on alternative financial services.

In the Reno-Sparks metropolitan area, 19,000 residents, or 11 percent of 175,000 Hispanic households, were unbanked in 2011, while an additional 44,000, or 25 percent, were underbanked.

But as the regional economy finds its legs, banks are beginning to see an increase in Hispanic clientele and are focusing on grassroots efforts to provide a wider range of financial services to those customers.

Wells Fargo District Manager Lisa Speth-Jones, who runs the bank’s Oddie Boulevard branch and also oversees Wells locations in Truckee, Fallon and Fernley, says the Wells branches at Oddie, Sun Valley, Northtowne Lane, Plumb Lane and Neil Road all have deep ties to the surrounding neighborhoods and their Hispanic residents.

In addition to making sure there is bilingual management and staff at each location, representatives from those branches routinely engage nearby business owners to bring their employees into the bank as customers, Speth-Jones says.

“It is absolutely crucial that we have that foundation. Banking is complicated, but we have simplified it to make sure we have the right people to ensure we are taking care of our customers. We are talking to business owners and sharing opportunities with them for financial education. It starts with creating an understanding of the products and services we have available and how we can make a difference in our customers’ lives.”

Inclusion in routine financial services is important, banking executives say, because unbanked residents can fritter away crucial dollars using expensive alternative banking services, such as check-chasing and payday-loan stores. Local casinos gladly cash paychecks for unbanked residents, but the option to gamble can be tempting with cash in hand, warns Terry, McQuattie, district manager for U.S. Bank.

McQuattie says many in the unbanked segment of the population of Reno-Sparks typically favor cash to pay bills and use wire transfer services to send money to relatives living outside the United States. It’s a difficult group to penetrate, McQuattie admits.

“A lot of different segments don’t really understand credit, or they got into credit and got into a credit problem,” he says.

U.S. Bank tries to increase its customer base within that demographic through local engagement at various branch locations. It’s also crucial to have managers and employees that are engaged in the region’s Hispanic communities. For instance, Branch Manager Maury Centeno, who heads the branch at Vassar Lane and Wells Avenue, was president of the Hispanic Chamber of Commerce before that group merged with The Chamber.

“Our goal with U.S. Bank is to be very connected into the communities where we have our branches,” McQuattie says. “We try to connect with as many of these areas as we can to educate them.”

Centeno and Andrea Ruvalcaba at a branch at Keitzke Lane and Peckham Lane also are fluent in Spanish, as well as several other tellers and bankers. That helps to avoid any disconnect when they answer customer’s banking questions.

MasterCard recently created a new initiative, Master Your Card Oportunidad, in response to the FDIC survey about the unbanked and underbanked to foster greater financial inclusion among Hispanics business owners and consumers. Business owners can get help setting up electronic payments for customers and learn how to use advanced accounting and payroll tools, while consumers can get pre-paid debit cards to foster a better understanding of the benefits of electronic banking.

Assemblywoman Lucy Flores, a champion of Nevada’s Hispanic community, says such programs help the state’s Hispanics avoid high fees at alternative banking companies and avoid problems tied to predatory lending practices.

“When you look at the percent of the Hispanic community in Nevada that is underbanked, that is a significant amount of money that is not going back into the hands of families,” Flores says. Master Your Card Opportunidad is a proactive way of dealing with a very serious issue by bringing financial institutions together and actively working on the problem to try and improve the financial environment for Latino communities.”