Struggling for the American Dream

Published on Tuesday, 02 September 2008 00:00

With a pink Bluetooth head set perched on her right ear, Gloria González stands behind a counter crowded with colorful pastries and a few check-out computers, ready to take orders for food or ring up customers.

González owns and runs Carrboro’s Don Jose Tienda Mexicana with her husband, putting in many more hours than she did when they worked at another store in Carrboro, but she said the chance to buy the store was too good to pass up.

“The first owner had seven stores, but then he sold every one,” González said. She said the previous owner’s financial problems led him to offer her family the store for a cheap price.

But González said the family had trouble finding money to buy the store.

“We wanted to apply for a loan, but the bank said it wouldn’t give us a loan,” González said.

After putting in applications with three different banks, the family was still out of luck.

“I don’t think it’s the language barrier; I don’t think they believe in us,” González said, adding that she thinks banks are weary in dealing with the Latino community because they don’t think Latinos will be able to make payments on their loans.

But trust is an issue that goes both ways in the relationship between the financial world and the Latino community. And for many Latinos in North Carolina struggling to make a living for themselves or to start a business, it’s the biggest issue of all.

A negative perception

“Sometimes the bigger banks will open accounts to the immigrants ... they’ll get their money but they won’t give them loans,” said Ángel Romero, director of communications for the Latino Community Credit Union, a Durham, N.C.-based non-profit organization.

Latino immigrants to the United States often come in with a negative perception of banks.

“In many Latin American countries, economic instability led to unreliable transactions and even frequent bank closings, causing customers to lose their money,” said John Chasteen, director of graduate placement in the history department at UNC-Chapel Hill. Chasteen has authored several books on the history of Latin America and has traveled extensively throughout the continent.

“If a bank folds, savings deposits are simply lost,” Chasteen said.
“Add to this other disincentives such as high user fees, being undocumented, not knowing English, and rarely having anything to save, and it's easy to see why people in that situation don't use banks much.”

Banks’ reputation in Latin American countries causes Latino immigrants in the United States to hesitate before opening an account.

“They think their money is safer if they put it under the mattress,” Romero said.

This perpetuates the stereotype that Latinos carry around large amounts of cash, leading to more crimes among the community.

Without opening bank accounts and using a credit card, people have no way of building up good credit, something essential when applying for any type of loan, be it home, business or car.

Lack of Services

When Raymundo Arenas, a Durham resident, wanted to open up his Tienda Hispana La Potosina five years ago, he couldn’t get a loan because he had no credit.

He ended up renting the space where his Latino convenience store now stands on Rosemary Street in Chapel Hill.

“There’s a lack of services (targeted at the Latino community),” Arenas said through a translator.

“Lately there have been more, but before there weren’t hardly any.”

The LCCU, which has five branches throughout North Carolina and three more in the works, offers credit-building programs, secured credit cards, loans and workshops on various financial topics. The credit union also helps customers apply for a federal taxpayer identification number, if they don’t have a social security number.

“One of the biggest problems that immigrants have when they come to the U.S. ... is that they don’t have credit history in the U.S.,” Romero said.

He added that this is a problem any immigrant faces, regardless of which part of the world he or she comes from.

To open an account at any bank, customers are required by the Patriot Act to present one form of identification, such as a driver’s license, a passport or a matrícula consular, an identification card issued by Mexican consulate offices, Romero said.

The LCCU tries to help immigrants without credit by offering alternative means of obtaining loans.

“We accept all credit,” Romero said. “If someone doesn’t have three years of credit history we will accept one year of utility bills.”

But González had no such luck when she and her husband applied for loans to buy their convenience store.

“We had great credit, one of the best scores,” she said, adding that she had always been careful with that aspect of the family’s finances.

“I don’t let him buy anything we don’t need,” González said, referring to her husband.

But their three loan applications were still denied. The family ended up borrowing the money they needed from González’s brother.

Sufficient Income

Kay Blocksidge, a bank officer at the East Franklin Street, Chapel Hill, Bank of America branch, said many circumstances can lead a bank to deny a customer a loan, but the most important factor is making sure the applicant has sufficient income to be able to make payments.

She said Bank of America asks all customers if they are U.S. citizens but that she assumes customers are telling the truth however they answer her.

“I’m not immigration,” Blocksidge said, adding that it’s not her job to question someone’s legal status.

The bank’s security checks will contact the branch later if a problem has been found with a customer’s social security number or taxpayer identification number.

She said the bank tries to have a Spanish speaker at every branch, but that a translation service is always available via phone. Bank of America also has financial programs to teach people about establishing credit or improving it.

“The Hispanic population is a huge population, and we want them to feel like they can come in here ... and do their banking,” Blocksidge said.

Feliciano Dimas and his wife Alma Delia González, a Chapel Hill couple who attended a LCCU workshop on buying a house, said that while now they trust American banks, they had a hard time communicating with them at first.

“The first time we went (to ask about a loan), they had a lot of requirements,” Dimas said through a translator.

He said he opened his first bank account when he was in high school in California. He first heard about building credit from family members.

“We trust banks here because they offer a lot of programs tailored to Latino families,” Dimas said.

They both said that when they moved to North Carolina more than three years ago, they had a hard time finding a bank with Spanish-speaking employees.

“In California everyone spoke (Spanish),” Dimas said.

But things are looking up, as they’re finding more and more Spanish-speaking services.

Anxious to build a home for their 3-year-old son, Dimas and his wife are trying to buy their first house.

The April 28, home-buying workshop they attended was the third in a series of three on the topic. Liliana Concha Pérez, branch manager of the Durham LCCU, went through important guidelines to follow once a person decides to purchase a house.

A group of five students, seated at a round table in a meeting room, took turns reading from a thick packet of recommendations for first-time buyers.

“First of all don’t be shy, ask questions,” Pérez said through a translator.

She told the group it’s imperative to find a trustworthy Realtor and ask him or her any questions they might have. She also addressed the importance of the house’s location and finding an affordable price range.

Services like these are growing as the Latino population grows. Blocksidge, who has worked for Bank of America for 28 years, said the bank implemented its interpreter telephone line in the last 10 years or so. It has also started marketing in Spanish in the past five to eight years.

According to to the U.S. Census Bureau, North Carolina has the fastest growing Latino population of the country, with a 393.9 percent growth rate from 1990 to 2000. In 2000, Latinos accounted for 4.7 percent of the state’s total population.

Paying Attention

Baltazar Perez, a Mexican native who works on his father’s farms in the western part of the state, says he thinks financial resources are more readily available to Latinos now than they were when his family first started farming.

“Twelve years ago it was hard to even get people to pay attention because we only had three acres,” Baltazar said.

His father, Domingo Perez, had previously worked construction and slowly made the switch to farming so that he could spend more time with his family. But starting up was hard, as resources were limited.

“It was a little bit hard; there were no tools, there were no tractors,” Domingo said. He said the family borrowed a tractor from an American friend in the beginning.

The switch was also hard for the family because Domingo was earning as much as $16 per hour as a manager in construction.

Baltazar said the family wasn’t sure how to go about getting financial help to start their farming business and that they weren’t aware of many Latino banking services.

“We had never had any loans from no one,” he said.

"If we would have had no income backing us up it would have been hard."

But they saved up money and eventually started leasing more and more land. They now farm 150 acres in both Henderson and McDowell counties, often working 12-hour days.

"We are committed to this; we are dedicated to the work,” Domingo said.

 According to the U.S. Census 2000, 24.8 percent of North Carolina’s Latino population works in construction or maintenance. This industry brings in a large amount migrant workers, who with short visas often send most of their money to their families back home instead of opening an American bank account, Romero said.

Luís Antonio, a migrant worker who lives in Hendersonville, said he hasn’t bothered to open a back account because he sends most of his money home.

“We don’t speak English – it complicates things for them," Antonio said, referring to banks in the United States.

He said he’s not aware of specific Latino financial programs and that it would be very hard for him to start his own farming business.

“We have to work hard and save as much as possible to get to that,” Antonio said.

To promote its programs, the LCCU advertises in Spanish-language media and trains people to be peer-to-peer educators. After completing six financial classes, the credit union holds a graduation for participants, who can then go out into the community and teach others or bring them in to LCCU workshops, Romero said.

While these services have helped people like Gloria González, who said she makes sure to keep track of her credit score, they still don’t bridge all gaps between the Latino community and the complex world of finance.

While she can’t exactly label it, González said she feels like Americans in business don’t trust her community. She said she saw this when she applied for loans to buy her convenience store and she sees it when her friends get car loans with higher-than-usual interest.

“Everything is kind of different for us.”

Catarina Saraiva is a senior at the School of Journalism and Mass Communication. She interned this past summer at the Triangle Business Journal in Raleigh.