Magazine article American Banker

Powell Hits Road to Plug Program for Hispanics

Magazine article American Banker

Powell Hits Road to Plug Program for Hispanics

Article excerpt

A road trip by Donald E. Powell underscores the importance that issues related to the Hispanic community have taken on.

On Tuesday the Federal Deposit Insurance Corp. chairman unveiled the Spanish-language version of the agency's Money Smart financial literacy course at a community college and job training center in a predominantly Hispanic community here.

In a speech, he called such communities and the immigrants flowing into them a "tremendous source of potential new customers" for banks.

Money Smart, a 10-module course distributed free to banks and community groups, covers topics such as payday lending and other fringe banking services.

"An estimated 60% of Latino immigrants are currently unbanked," Mr. Powell said. "Yet over $18 billion is wired annually by this population to Latin, Central, and South America, with $9.5 billion alone wired to Mexico. Many pay high fees to wire-transfer companies and check-cashing operators."

Chicago is the first stop of a tour that also will take the chairman to San Antonio and Los Angeles as he pitches the program to banks, local governments, educational institutions, and community organizations.

Money Smart, modeled after Financial Links for Low Income People, sprang from an FDIC "listening tour" on predatory lending. Since its launch in July 2001, 7,500 copies of the coursework have been ordered, including more than 2,000 orders from banks.

More and more banks are targeting this fast-growing segment. According to U.S. Census data, the Hispanic population rose 57.6% between 1990 and 2000, to 35.3 million, with Mexican immigrants accounting for the majority of the increase.

Many banks no longer require that Mexican-Americans have passports or Social Security cards to open accounts. Instead they are accepting matricula consulars -- identification cards issued by Mexican government to nationals living abroad. …

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