July 24, 2007
Times-Picayune
Jen DeGregorio

Nonprofit Spearheads Push to Bridge Gap

Concerned about a perceived lack of financial literacy among New Orleans’ growing Hispanic population, a group of activists has joined forces to educate that community about money management.

Led by Louisiana Appleseed, a nonprofit comprised of volunteer lawyers, a new Financial Access Program aims to study how Louisiana banking institutions are reaching out to Hispanics, low-income earners and other groups considered underserved by the financial sector. The program also plans to offer free financial classes, many of which will be taught in Spanish.

"We have a growing community," said Lucas Diaz, executive director of Puentes New Orleans Inc., a group working with Appleseed on the program. "Many Hispanics don’t know the language, and they don’t know the community and . . . we know a good deal of them are hesitant to use institutions."

The number of Hispanics living in and around New Orleans has skyrocketed since Hurricane Katrina, as foreign workers have flooded the city to help with rebuilding efforts. The Hispanic Apostolate of the Catholic Archdiocese of New Orleans estimates that there are between 80,000 and 100,000 Hispanics living in the New Orleans metropolitan area, compared to about 60,000 before Katrina.

While language and cultural barriers keep many Hispanics away from banks, Diaz said, the problem is even greater among undocumented Hispanics who fear banks could discover their illegal immigration status.

But, undocumented or not, "Latinos need to integrate into the community, become stakeholders in the community," Diaz said. "Ways for that to happen is to buy homes, establish bank accounts and establish credit so people know they’re here."

Appleseed, a national organization with state affiliates, has completed similar programs in Georgia, Nebraska and Texas. The Louisiana program would be modeled on those programs, which found a lack of communication between banks and Hispanics.

While Louisiana Appleseed plans to focus on the Hispanic community, it also will assess the needs of low-income earners in general, said Christy Kane, Appleseed’s executive director.

"There was a feeling that there were some segments of the African-American community that could benefit from this as well," she said.

Appleseed volunteers already have conducted interviews with 11 local banks and four credit unions, asking questions about how they specifically target Hispanics and low-income earners. The volunteers next will interview community leaders about services those populations want from the financial sector.

The nonprofit plans to use the information in a report that will make recommendations for better serving Hispanic and low-income populations. Classes are a crucial component of the Financial Access Program, said Deirdre Johnson, director of programs for the Urban League of Greater New Orleans, another partner of Appleseed. "It speaks to the concept of ’teach a man to fish,’ as opposed to ’give a man a fish,’ " she said.

Appleseed plans to partner with Puentes, the Urban League, the Hispanic Apostolate and other groups to offer free classes and information sessions at various locations around the city that likely would draw interested communities. Spanish-language classes likely would be available at all locations, Kane said.

The Urban League already offers financial tutorials, some of which are taught in Spanish. But there is "a lot of fear" of banks, and more classes would help, Johnson said.

Diaz said he hopes the classes will dispel myths that have kept Hispanics away from banks.

For example, many undocumented workers believe they must provide Social Security numbers to banks, and that not having such identification -- or having false identification -- would be prohibitive to opening an account, he said. But most do not realize that they can apply for a government tax identification number, which often can be used instead, he said.

The Greater New Orleans Federal Credit Union is pushing the use of the tax identification number and specifically targeting undocumented Hispanics.

In the months ahead, the credit union plans to launch a "safe accounts" program, in which undocumented customers can open checking accounts without a tax identification number or a Social Security number. A safe-account applicant would have to show only a picture identification, such as a driver’s license, and proof of address.

"If all they ever want is somewhere to keep their money safe, then we want to be able to give that to them," said Rebecca Hernandez-Collazo, the credit union’s business development representative for the Hispanic community.

Customers who want more, however, would be encouraged to apply for a tax identification number to gain access to services such as loans and interest-bearing savings accounts. "The need is there, and the demand is there," Hernandez-Collazo said. Despite their fear, underserved communities have no lack of curiosity and desire to take control of their financial futures, Johnson said. "Once you can open up the window and create a conversation . . . then folks are very interested in getting the information," she said.