- The Washington Times - Tuesday, December 28, 2004

More than half of all U.S. retail banking growth in financial services during the next two decades will come from America’s expanding Hispanic population, the Federal Deposit Insurance Corp. reported.

Traditional banks and upstarts are competing to carve out niches in the fast-growing but underserved market.

“Greater consumer participation by Hispanics in mainstream financial markets can improve their ability to build assets, create wealth, and promote economic stability and vitality in their communities,” the FDIC said in its winter issue of the Supervisory Insights journal. “By providing needed financial services to this growing market, banks will find new and welcome sources of revenue.”

BB&T; Corp., a Winston-Salem, N.C., bank with branches in Virginia, Maryland and the District, last week announced a Spanish-language Web site with information about the bank’s money transfer products, educational audiotapes and its Hispanic Banking Centers.

“Hispanics are the fastest growing minority in the United States,” said Luis Lobo, head of BB&T;’s Hispanic Segment Council. “Their income is growing and they need checking and savings accounts, loans and investment services.”

Julio Lopez-Brito, president of NuAmerica Corp., is establishing a community bank in the Washington area targeted at the growing Hispanic market. He hopes to open the proposed NuAmerica Bank — with branches in Virginia, Maryland and the District — in less than a year and eventually expand it from Richmond to Baltimore.

“There is a large segment of Hispanic population that doesn’t bank. We have to find a way to bring them into the fold,” Mr. Lopez-Brito said.

The FDIC said the Hispanic banking market is still in its infancy.

“As it continues to mature, large banks and community banks alike will find new opportunities to meet the demands of the Hispanic marketplace by customizing their products to its unique needs,” the FDIC said.

U.S. banks are expected to spend $8.5 billion through next year marketing to and servicing the Hispanic market, the FDIC said. The number of Hispanic households with checking accounts is projected to increase by 57 percent and savings account holders by 76 percent.

Despite ramped-up efforts, a report released this month by the National Council of La Raza, a Hispanic civil rights group, said the U.S. financial industry has failed to reach Hispanics with financial education products and services.

“Teaching the Hispanic community how to avoid burdensome consumer debt, become homeowners, start a college fund, save for retirement and build wealth for their families all require financial education information and customized individual counseling that many Latinos are simply not getting,” said Janet Murguia, La Raza executive director and chief operating officer.

Hispanics accounted for 12.6 percent of the U.S. population in 2000. The population is expected to nearly double by 2050, the Census Bureau reports.

Hispanics accounted for 14 percent of total growth in asset accounts and 13 percent of growth in debt accounts from 1992 to 2001, the FDIC said. The FDIC projected that by 2007, these rates of growth will have accelerated further, with a projected 20.5 percent growth in asset accounts and 15.5 percent growth in debt accounts.

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