- The Washington Times - Tuesday, July 9, 2002

Henry O. Aldana hopes to save enough money to retire in 10 years, when he turns 45. "I don't necessarily want to retire that early, but I would like it to be an option," said Mr. Aldana, principal of Aldana and Associates PSC Ltd., a Rockville accounting and management consulting firm.

He has invested in an Individual Retirement Account through his company. He and his wife, a Montgomery County public school teacher, have invested in a personal IRA. In addition, they have put money in an educational IRA so they can afford to send their children ages 9 and 10 to college.

Still, Mr. Aldana wonders whether he has done enough. "I still feel there may be major pieces of my retirement plan that I need to work on," he said.

Perhaps. But Mr. Aldana, a native of El Salvador, has done more to plan for his financial future than many Hispanics, according to statistics.

The most recent U.S. Department of Labor figures available reveal that of the 12.3 million Hispanics in the work force in 1995, 32 percent or about a third had employee pension plans, compared with one-half (51 percent) of whites and more than two-fifths (44 percent) of other minority groups.

Hispanics younger than 65 are less likely than whites or blacks to receive income from interest on savings and investments, according to the National Council on La Raza, a nonprofit group that fights poverty among and discrimination against Hispanics.

Hispanic workers and retirees are also less likely than whites or blacks to receive income from dividends on stock or mutual fund shares.

These trends have caught the attention of financial groups such as the Bond Market Foundation, which recently started Ahorrando.org, a Web site geared toward educating Hispanics about personal finance.

Banks also are developing products and services to reach Hispanic customers, particularly in the Washington area, where the Hispanic population mushroomed during the 1990s. More than 445,000 residents in this area, including the outer suburbs, identified themselves as Hispanic during the 2000 census, an 88 percent increase from 1990.

"One of the issues we have seen is that many Hispanics are reluctant to trust financial institutions," said David Ritchie, chairman and chief executive of Farmers Bank of Maryland, one of eight subsidiary banks owned by Falls Church-based First Virginia Banks Inc.

Some immigrants are wary of U.S. banks because similar institutions in some Spanish-speaking countries are corrupt, according to research by the Bond foundation.

Farmers Bank recently began printing some of its brochures in Spanish and ensuring there are Spanish-speaking employees at its branches, particularly in Annapolis and other areas with heavy Hispanic populations. "We want to build trust with our Spanish-speaking customers," Mr. Ritchie said.

Other banks are going even further. Provident Bankshares Corp., which operates branches in Baltimore and Washington, plans to do more advertising in Spanish and eventually offer its automated telephone system in that language. The system allows customers to conduct a variety of activities, such as checking balance, over the phone.

"In a lot of cases, it's not enough to translate a brochure into Spanish. You have to go the extra step," said Lillian S. Kilroy, Provident's marketing director.

U.S. banks also are targeting Mexican migrant workers, who sent home $9.2 billion last year.

Banks are expanding into Mexico, hiring Spanish-speaking employees and easing red tape for migrants even those living in the United States illegally so they will open accounts. Money-transfer fees are falling, and banks are studying the possibility of offering expanded services such as loans and insurance.

Until now, migrants had few options. They often paid companies such as Western Union up to 20 percent of the money they wired home and stashed their savings under mattresses or in cookie jars.

In Kentucky, for example, the Republic Bank & Trust Co. began opening migrant accounts in September that include two ATM cards: one for the client in the United States and another for a family member abroad.

The Bond foundation says its Ahorrando Web site which uses the Spanish word for savings will be key to improving financial literacy among Hispanics. The site, believed to be the first of its kind, is designed to explain budgeting, the need to save, types of banking accounts and the differences between bonds, stocks and mutual funds.

"The Spanish-speaking population has to become more comfortable with financial institutions. They understand the need to save, but they don't necessarily trust banks," said Micah S. Green, president of the Bond Market Association, which represents firms in the bond-trading industry and oversees the Bond foundation.

This story is based in part on wire-service reports.

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