Banks are going after the county’s Hispanic, Korean and Vietnamese residents and their businesses. Now it’s credit unions’ turn.
Last week, Comunidad Latina Federal Credit Union received approval from federal regulators to open its doors in coming months in Santa Ana.
It becomes only the third credit union chartered in California in the past six years, said John McKechnie, director of public and congressional affairs for the National Credit Union Administration, which regulates credit unions.
Comunidad Latina is set to focus on the large and growing Hispanic population of Santa Ana, according to its organizers.
Chief Executive Luis Valerio was hired by Santa Ana-based Orange County Teachers Federal Credit Union to help launch Comunidad Latina.
OCTFCU, the county’s largest credit union with assets of more than $6 billion, is working with other credit unions to lend money and offer help to Comunidad Latina.
Others involved include Lake Forest-based Eagle Credit Union; Brea-based Evangelical Christian Credit Union; Orange-based Health Associates Federal Credit Union; Santa Ana-based Orange County’s Credit Union and La Habra-based South Western Federal Credit Union.
Credit unions require far less money to start than banks, which have to raise $15 million or more from investors to get rolling.
Comunidad Latina plans to raise about $1.2 million, according to organizers. The money, mostly in the form of loans, is set to be kept in an interest-free account and be repaid in three years, Valerio said.
Valerio is a former manager of a Citibank financial center in Santa Ana.
He headed up Citibank’s “Hispanic Initiative” in OC. The effort included tailoring services to Hispanics and offering money transfers to Latin America.
Parent Citigroup Inc. elbowed its way into the sector in 2001 by buying Mexico’s Grupo Financiero Banamex SA de CV, which had a California banking unit.
Membership in Comunidad Latina, which plans to have a branch at 1317 W. Warner Ave., will be open to Santa Ana residents and those working there, Valerio said.
Roughly 75% of Santa Ana’s 340,000 people are Hispanic, with half of the households classified as Hispanic-speaking, according to Rudy Hanley, chief executive of OCTFCU.
“Everything will be bilingual” at Comunidad Latina, Hanley said. “We picked Santa Ana because it has a huge Hispanic and Latino population that we felt had a great need for this kind of service.”
Following Banks
Big banks are angling for part of the growing Hispanic banking market, so it makes sense for credit unions to get a piece of the action, Hanley said.
Hispanics, which make up a third of OC’s 3 million people, are a sizable part of OCTFCU’s membership.
Comunidad Latina will face many of the same hurdles banks have.
Some Hispanics, particularly recent arrivals, have been slow to embrace banks and deal largely in cash.
Some may not be here legally, making them leery of banks. Others are distrustful of banks after living through Mexico’s banking and currency problems in the 1980s and 1990s.
Bank of America Corp., Wells Fargo & Co., Union Bank of California and Banco Popular all have forged strategies to reach Hispanics.
Banco Popular, a unit of Puerto Rico’s Popular Inc., earlier this year moved its California bank headquarters to Anaheim from Santa Fe Springs.
The banks use bilingual tellers. They let Hispanics transfer money securely to family and friends in Mexico and other Latin American countries.
Comunidad Latina plans to offer a similar service, Valerio said.
Earlier this year, backers of a proposed commercial bank announced plans to target Santa Ana’s Hispanic population. Fortis Business Bank would become the first of its kind in OC to target Hispanics.
Following regulatory reviews, Fortis hopes to open in the fall after raising $12 million to $15 million.
The bank plans to occupy a former Sanwa bank branch at 1666 N. Main St. in downtown Santa Ana.
Fortis has an impressive list of backers.
They include developer Arthur Birtcher, head of San Juan Capistrano-based BirtcherAnderson Realty LLC; Isabelle Villasenor, president of Cypress-based Dejon Enterprises Inc., a McDonald’s franchise operator; Manuel Ramirez, president of Irvine-based accounting firm Ramirez International; Brothers Alfonso Bustamante, a psychologist, and Carlos Bustamante, a Santa Ana councilman; and Alfredo M. Amezcua, president of the Rancho Santiago Community College District.
