Magazine article American Banker

Rehab Eyed as Entree to Newer Ethnic Groups

Magazine article American Banker

Rehab Eyed as Entree to Newer Ethnic Groups

Article excerpt

SMALL URBAN BANKS HAVE A GOLDEN -- if daunting -- opportunity to grow along with the immigrant groups settling in their service areas, says Francine Justa, executive director of Neighborhood Housing Services of New York Inc.

Since 1980, the not-for-profit, intermediary lender has funded the rehabilitation of 2,408 apartments in New York City -- most recently in Brooklyn's Bedford Stuyvesant neighborhood.

Whereas the population of Bed Stuy is almost entirely black, however, the lender's study exploring the feasibility of a rehab initiative in Queens shows "a variety of credit cultures that's just astounding," Ms. Justa says.

The $5,000 study was funded by eight banks and thrifts. Released Nov. 23, it demonstrates a need for a Neighborhood Housing Services initiative in northern Queens -- where, until recently, whites, African-Americans, and Hispanics made up the dominant population groups.

In recent years, however, waves of Korean, Indian, Arab, and Chinese immigrants have arrived in the borough, and the diversity they represent "portends the future of urban neighborhoods in the country," Ms. Justa says.

"In 10 years, a lot more people will be banking at ATMs or computers, but the immigrants in urban areas will still be walking to their branches. Small banks should find a way to attract this [walk-in] business, but I know it won't be easy."

James J. O'Donovan, senior vice president of Queens County Savings Bank, agrees -- but his $1 billion-asset institution has been trying hard.

"We're advertising in Spanish and Asian newspapers, and we've held dual-language seminars in Mandarin and English."

The Queens initiative was the idea of Richard King, vice president of $600 million-asset Flushing Savings Bank.

Mr. King says "it's not a foregone conclusion that we'll fund the project. …

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