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VOL. 35 | NO. 27 | Friday, July 8, 2011

Overcoming historical mistrust of banks is key to building base

By Judy Sarles

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Having banks that cater to the needs of the Hispanic community is helpful. Getting that community to use the banks is a little harder.

Local nonprofits are stepping in, providing financial education programs for those who might be new to the Nashville area, unfamiliar with banking services in the United States or accustomed to handling transactions on a cash-only basis.

“An understanding of the financial system in America has to be explained,” says Tatia Cummings, vice president-commercial banking at Reliant Bank.

A January 2009 survey conducted by the Federal Deposit Insurance Corp. shows about 19.3 percent of Hispanic households in the United States are unbanked, operating on a cash-only basis with no checking or savings account.

Although Hispanics have a reputation for being fearful of financial institutions, says Jose Gonzalez, a co-founder of Conexion Americas, that fear is no longer the reason why many Hispanics are unbanked. Past fears stemmed from the banking crisis in Mexico and Latin American countries about 20 to 30 years ago when banks failed and a lot of people lost their money. Now many Hispanics are unbanked because they have not used financial institutions and they are unfamiliar with how banks work, how easy it is to interact with them and how necessary they are.

“It’s especially people that come from rural communities where there’s not a financial infrastructure,” says Gonzalez.

Financial education takes shape in different forms at Conexion Americas, a nonprofit that helps Hispanic families integrate into the local community. One Conexion Americas program provides basic financial literacy, including budgeting and how the banking system works. Other programs cover the essentials for paying taxing, how to buy and finance a home, and entrepreneurship.

Catholic Charities offers a general orientation for refugees when they first arrive in Nashville, and the nonprofit’s case managers take their clients to a bank to help them cash their first paychecks. The orientation includes some financial education, but not much, because the organization is required to share a lot of information and has to limit its sessions to two hours.

“Because that’s about as long as anybody can hear a bunch of new information and retain it,” says Nancy Salyer, resettlement coordinator at Catholic Charities.

Regions Bank performs outreach in the community through several nonprofit organizations to help with financial education and to inform the Hispanic population as well as others in the community about the bank’s products and services. Regions supports Conexion Americas in its outreach to the Hispanic community, and the bank has partnered with the nonprofit Woodbine Community Organization for quite some time. At Woodbine, Regions has taught a vehicle financing workshop in Spanish, and the bank, like many other banks, teaches the Federal Deposit Insurance Corporation Money Smart curriculum, which is available in several languages, including Spanish.

“I think the general public has to be comfortable with banking services,” says Latrisha Jemison, senior vice president, regional community affairs manager at Regions. “There are a lot of unbanked people out there, regardless of race, ethnicity, and socio-economic background, that may not be comfortable with the banking system or may not have been educated.

“So that’s why we, along with all the banks, we all are reaching out to promote financial education to let people know what’s available so that we don’t have consumers using alternatives to the traditional banking system. I don’t think it’s something you find in one community. I think that it’s something that we have seen in several segments of the community that there is just an unknown of the banking system.”

Over the past five years, Bank of America has also been a strong supporter of Conexion Americas:

· In 2009, a $10,000 Bank of America grant provided general operating support to help recent Hispanic immigrants and their families in three areas of human development: social integration, economic integration, and civic integration. The grant also offered support to low-income Hispanic families through assistance in foreclosure prevention and parent training for school involvement.

· In 2007, the bank provided a $200 Neighborhood Builders grant.

· In 2006, Bank of America provided a $10,000 grant for general operating support.

· A team of about 30 Bank of America volunteers is trained in providing financial literacy classes, including classes in Spanish.

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