By Anne Fawcett Andrea Sterling, a native of Colombia, has an account at Bank of America for convenience, but she goes to Durham's Latino Community Credit Union when she wants to talk to someone about her finances. "I never go in [Bank of America] - you have to pay for their services," the Raleigh resident said as she shuffled through papers with the credit union's assistant manager, Idalia Portillo. "Most banks don't take the time they take here." Sterling is one of nearly 6,000 members who have joined the credit union since it opened two years ago. The financial institution's founders anticipated 500 members in their first year, but signed up 2,000, said Luis Pastor, the credit union's president. "We're growing so fast, no one can imagine what's going to happen in two years," he said. As the credit union grows, its Hispanic customers are the most recent example of a century-old phenomenon in Durham - a banking system that draws customers along racial lines. Mechanics & Farmers Bank, started by nine black businessmen in 1907, and Mutual Community Savings Bank, which was founded in 1921, still have reputations as Durham's banks for the black community. The two banks share a similar background with the credit union in that they were both born of an underserved community pushing for the financial services it needed, said Lucera Parker, marketing director at M&F. As a result of M&F's historical mission, blacks are the bank's primary market, she said, though the bank - which has $168 million in assets - offers competitive services for all customers. "I think it goes back a long time to our deep heritage in self-sustaining [institutions]," said James Sansom, a former M&F executive who is now a first vice president with Cardinal State Bank in Durham. People bank at institutions because of pride and loyalty, said Sansom, whose great-grandfathers, John Merrick and Aaron Moore, were two of the nine founders of M&F in 1907. "You can't buy loyalty," he said. "People bank with you because of service you render. Other criteria are the culture, corporate philosophy of institution - is it something you can believe in and feel good about?" The number and diversity of Durham's minority-owned financial institutions and their relative scarcity elsewhere could be another reason why some Durham banks draw mostly from one segment of the community. M&F and Mutual Community are two of only 31 black-owned banks in the country, Parker said. Mutual had $68 million in assets in June 2001. Meanwhile, the Latino Community Credit Union is the only financial institution in North Carolina aimed at Hispanics and only the second in the Southeast. But the practice of minorities banking at minority-owned businesses isn't specific to Durham, said Raphael Bostic, director of the Casden Real Estate Economics Forecast at the University of Southern California's Lusk Center. "There is a degree of wariness in the minority community about banks and the banking industry in general," Bostic said. "The minority public tends to gravitate toward banks they feel are less likely to take advantage of them." Part of the issue might be that larger banks haven't reached out to other communities as well as they could have, he said. But the other part is that minority-run institutions, both black and Hispanic, offer services specialized to their target populations. "There's a great deal of variance in the types of services banks offer," Bostic said. "To the extent that they're providing services the public wants that they're not getting at a larger bank, then it's actually a good thing." The credit union is most attractive to Hispanic customers because the staff speaks their language, said Ivan Parra, director of the Durham advocacy group El Centro Hispano. In addition, he said, customers appreciate the staff's explanations of banking concepts. They also like >having the opportunity to elect board members or serve themselves. "Banks usually focus on the more wealthy, sophisticated sort of client, but the credit union fits the needs of recently arrived immigrants to the community," he said. The credit union estimates that only 25 percent of the 17,000 Durham Hispanics and the 80,000 to 100,000 Hispanics in the Triangle have bank accounts. The credit union, which was created in response to crimes against people who carried their savings in cash, has $11.3 million in assets, including $4 million from customer deposits, Pastor said. "Two years ago, that $4 million was on the street," he said. "Now this number is here, safe for the community." In addition, the credit union has issued more than 1,000 personal and car loans to its members over the past two years and wires more money to Latin America than any other credit union in the United States, Pastor said. The nonprofit has no advertising budget, so its name spreads by word of mouth. "Right now, our marketing is our product and our quality of service,"Pastor said. Luring customers. Although some customers seem to gravitate to Durham's banks based on race, the financial institutions are eager to recruit from the entire population. "It's a misconception that the Latino Community Credit Union only serves Hispanics," Parra said. "Anyone who walks in the door will be served in the same way." About 15 percent of the bank's customers are from other minority groups, Parra said, including hundreds of Kenyan immigrants. The Hispanic focus didn't deter Moses Shipiti, a recent Kenyan immigrant who stopped by the credit union last week to learn more about its services. Fellow Kenyans recommended the credit union, the 33-year-old construction worker said. "They're very happy with the service here," he said. "They say it's good and fast." M&F is committed to seeking out customers of all races as it strives to be competitive with other local banks, Parker said. "We want to help make certain everybody who deserves to have their financial needs met can do so comfortably and with respect," she said. And larger national banks are jumping to offer services geared to Hispanic customers, a market that's estimated to have $452 billion in buying power. Hispanic buying power in North Carolina last year was about $3 billion, a 255 percent increase since 1990, according to the Selig Center for Economic Growth. Bank of America, Wells Fargo, Citibank and SunTrust allow customers to set up accounts using ID cards issued by the Mexican Consulate instead of a Social Security number. Wells Fargo allows customers to wire $1,000 to Mexico for a flat $10 fee, while Bank of America has set up a system to allow customers' families to withdraw money from ATMs in Mexico. The Charlotte-based bank has begun a $40 million marketing campaign to attract black, Hispanic and Asian customers. In addition, branch personnel speak Spanish and several Asian languages, depending on their neighborhood, said Gillian Breidenbach, a Bank of America spokeswoman. "We want [customers] to be able to have conversations in their native language, because that helps to build trust," she said. "They're shaking hands with someone who looks like them, talks like they do, and they know that our associates have an understanding of their heritage and culture." While the Mexican market has the greatest need, the company is considering extending the services to other Latin American immigrants,as well, she said. Despite larger banks' efforts, Pastor said they're not going far enough. "Banks are thinking about the Latino market," he said. "We are thinking about providing services to the Latino community."
July 17, 2002