- The Washington Times - Tuesday, May 28, 2002

SOUTH GATE, Calif. (AP) The Wells Fargo Bank branch in this Los Angeles suburb looks like it belongs in Mexico a bland white exterior has been repainted in the reddish brown hues of a pueblo, and the lobby spiced up with Spanish-language song lyrics and Mexican artwork.
The remodeling job is one of the ways in which bankers are trying to appeal to the nation's Hispanics, a rapidly growing market that until recently attracted little special attention from the financial-services industry.
"Once you see an emerging opportunity like this, you have to ask yourself what you need to do better," said Carrie Tolstedt, who oversees Wells Fargo's retail operations in California.
Banks are creating programs to make it easier for Mexican immigrants to open accounts, spending more money on Hispanic ads and overhauling branches in communities like South Gate, where more than 80 percent of the 96,000 residents are Hispanic.
The remodeled branch is "like a security blanket for our customers. It's much more comfortable for them to come in here now," said Iliana Concepcion, a personal banking officer whose desk sits in front of a painting by the Mexican artist Diego Rivera.
In the first year after the renovations, the number of South Gate households with accounts at the office increased by 6 percent, Wells Fargo said. Before the remodeling, the growth rate was less than 1 percent.
The uptick in business has translated into longer lines at the branch, but the customers waiting up to 30 minutes to see a teller on a recent Friday afternoon didn't seem to mind.
"It's better now," customer Patricia Nava said. "They seem to want to help you more."
If bankers hope to succeed in the Hispanic market, they probably will have to prepare for crowded lobbies and offer more personal services because much of the Latino culture revolves around face-to-face contact, said Andrew Erlich, a minority marketing consultant in Woodland Hills.
The preference for more human interaction contradicts the banking industry's increasing emphasis on automating services through computers and telephones. But as so many upscale customers shift money into mutual funds and brokerage accounts, revenue-hungry bankers are more willing to accommodate Hispanics, particularly the millions of Mexican immigrants who don't have U.S. bank accounts.
The Federal Reserve Bank has estimated that as many as 25 percent of the nation's Hispanics lack accounts. Many pay high fees to check-cashing services and wire services to transfer money to relatives in Mexico and other Latin American countries.
Bankers believe they can make a decent profit while charging these customers lower fees for similar services.
Having a U.S. banking account can do more than just save Hispanics money it provides the financial foundation needed to get credit cards, auto loans and home mortgages, said Carlos Santiago, co-chairman of Santiago and Valdes Solutions, a minority consulting firm in San Francisco.
"This has always been a cash-rich, credit-poor segment of society," Mr. Santiago said. "Having a banking relationship can help give them the credibility to change that."
The demographics are a powerful magnet. The U.S. Hispanic population increased by 61 percent between 1990 and 2000, ballooning from 21.9 million to 35.3 million, according to the U.S. Census.
Although many U.S. Hispanics are poor, the group is gaining financial clout. Hispanics' disposable income rose from $530 billion last year to a projected $600 billion this year, according to Santiago and Valdes Solutions.
Most demographers expect such growth to be robust for several decades. California's Hispanic residents, already nearly one-third of the state's population, are projected to outnumber whites sometime in the next 20 to 30 years.
"Any bank that ignores the shift in these demographics is going to be dead in the water," predicted Ken McEldowney, executive director of Consumer Action, an advocacy group specializing in banking issues.
Bankers across the country are courting Mexicans the biggest piece of the Hispanic market by letting them open accounts with a form of identification called "matricula consular."
These cards are issued to immigrants who typically don't have Social Security numbers or other documents usually required by the industry. Matriculas, issued by Mexico's U.S. consulates, are particularly popular among illegal immigrants.
San Francisco-based Wells became the first U.S. bank to accept matriculas seven months ago and since then has opened more than 25,000 accounts for new customers using that form of identification.
Several other major banks, including Charlotte, N.C.-based Bank of America, New York-based Citibank and Atlanta-based SunTrust Banks, also have decided to accept matriculas.
The trend is being criticized by activists who want illegal immigrants out of the United States.
The banks "are willing to reward illegal-alien criminals in exchange for bigger profit margins," said Barbara Coe, chairman of the California Coalition for Immigrant Reform.
But that kind of reaction hasn't discouraged the big banks.
Bank of America has quadrupled its budget for minority marketing to $40 million this year. Most of that money is earmarked for the Hispanic market, with slogans such as "Creemos en ti" Spanish for "We believe in you."
Wells is so eager to sign up more Hispanic customers it is dispatching managers to California farms to talk to hundreds of Mexican immigrant workers about the advantages of having a bank account.
The success of the remodeled branch in South Gate has encouraged Wells to make similar changes at Southern California branches in two other heavily Hispanic communities Panorama City and Bell.
"We think there are more risks in not taking these steps than in taking them," said Robert Byrne, director of Wells' diverse growth segments division.


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