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September 23, 2004
Barrios raps banks for tepid
outreach
Jeremy Schwab
Bay State banks and credit unions must do a better
job of reaching out to prospective Latino customers, according
to a report released Monday by state Senator Jarret Barrios.
Barrios urged the bankers and credit union heads to accept passports
or Matricular Consulars (currently issued only by the Mexican
government) as proof of identity for those wishing to open accounts.
The senator also urged the industry to establish more bank branches
in commercial centers frequented by Latinos, offer lower fees
for those wishing to send money overseas and hire more bilingual
employees.
Barrios has enlisted the Massachusetts Bankers
Association and the Massachusetts Credit Union League to open
a dialogue with financial institutions across the state on how
they can provide better access and services to those who do not
speak fluent English.
“In the United States, we have a secure banking system,
that is there for people to take advantage of,” said Barrios
following a State House press conference Monday. “But only
if they are financially literate, if there are people [at banks]
to communicate with and there aren’t too many federal and
state barriers.”
According to Barrios, 60 percent of Latinos in the United States
do not have bank accounts.
Latino purchasing power, however, is estimated at $653 billion
nationwide, according to the report issued by Barrios’ office.
Thus, Latinos represent a significant untapped market.
“This group is the fastest-growing group in the country,”
said Erika Eurkus, program director at Accion, a group that is
working with Barrios for expanded bank access. “Their buying
power is only growing, so the opportunity for banks to serve this
large market is only going to grow.”
Despite the potential customer base, banks in Massachusetts are
generally doing little to attract Latinos.
A survey of nearly 100 banks, credit unions and money transfer
operations by Barrios’ office this summer found that 74
percent of banks had no Spanish-speaking customer service representatives
in their call centers. The same percentage had no Spanish-speaking
staff and no Spanish literature on-site.
For credit unions, the statistics were even more dramatic. Of
the 62 surveyed, 97 percent had no Spanish literature on site.
At 85 percent of the credit unions, no Spanish-speaking staff
were present.
Despite these statistics, Massachusetts Credit Union League Senior
Vice President Rob Kimmett told press conference attendees, “Service
to those new to the United States is in our DNA.”
When pressed to explain the incongruities between the statistics
and his statement, Kimmett said that he was referring to the fact
that over 100 years ago many credit unions were founded by immigrants.
“Keep in mind many credit unions are small and serve a limited
membership,” he told the Banner.
The lack of Spanish-speaking customer service representatives
and the lack of literature in Spanish causes many Latinos to decide
not to open accounts, according to the report.
Other factors include a distrust of banks based on past experience
with unreliable banks in their countries of origin, and difficulty
providing all the necessary identification required by U.S. banks.
By investing their money in banks, Latinos and other immigrants
can build a credit history to help them purchase a car or a house.
They can also save money for emergency use while avoiding the
high fees charged by check cashing agencies.
The Massachusetts Bankers Association and Massachusetts Credit
Union League planned to hold a closed-door meeting with 140 to
150 administrators in banks and credit unions to discuss the changes
urged by Barrios.
“We agreed to work with [Barrios] as we went through the
process of perceived difficulties,” said Mass. Bankers Association
Executive Vice President Kevin Kiley. “Financial literacy
is a major priority. Latinos are an emerging market.”
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