financial literacy
BY DARYL C. HANNAH
Have Immigrant Parents?
Plan Their Financial Future
Walter Alvarado is like many
Latino immigrants. The 64-year-old
retired Revlon manager has been in the
United States for more than 30 years and
still doesn’t really trust the banking system.
Why? He doesn’t completely understand
how the system works.
“My father is always checking his bank
statements,” says his daughter, Adriana
Alvarado. “He is constantly worried that
the bank will lose his money.”
Walter’s fear isn’t unusual. By the year
2050, the U.S. Latino population will swell to
132.8 million, according to the U.S. Census
Bureau. That’s double the share of the total
population in 2000, from 15 percent to 30 percent. Unfortunately, however, many of these
immigrants won’t be financially prepared for
retirement for two reasons: a strong distrust in
the banking system and poor access to information.
“In Latin America, there is not a lot of trust in
institutions, particularly in the financial institutions or
government,” says Louis Barajas, president of Wealth
& Business Planning, a financial-planning company
that specifically targets traditionally underrepresented
groups. “[Many] Hispanics over here do not use banks
or a banking institution; they tend to use check-cashing
places. You will find that the older the people are, the
number goes higher.”
The Federal Deposit Insurance Corp. (FDIC) says
that by 2015, about half the retail growth at banks in
the United States will come from Latinos, more than
50 percent of whom (about 20 million) don’t yet have
checking accounts.
Banks, however, are trying to bridge this gap with
the Latino-immigrant community. In 2003, KeyBank,
No. 33 on The 2008 DiversityInc Top 50 Companies
for Diversity® list, launched KeyBank Plus, a check-cashing service aimed at enticing customers who traditionally don’t use banks. The program is available in
Ohio, Colorado, Idaho, Maine, Oregon, Utah, Indiana
and Michigan.
In 2004, Bank of America, No. 3 in the Top 50,
launched SafeSend, a no-fee ATM remittance program
for Latino checking-account holders, which allows
them to send money to friends and family members
in Mexico for free.
A lack of information has also put many Latino-immigrant families at a disadvantage, making them
ill-equipped to create a strong financial plan for the
later years, warns MANA President and CEO Alma
Morales Riojas.
“A large amount of grant money is given to organizations to produce fancy, glossy materials and DVDs, but
unfortunately, they don’t do much good because they
are being sent to families that don’t even have a computer,” says Riojas, who admits that complicated financial
web sites and handbooks frustrate her. “They are also
not willing to print the materials in two languages. If
you are trying to reach the elderly, you are going to have
to do it in Spanish. It’s a language that they understand
better and that they will feel more comfortable with.”
