Lending to Latinos: financial institutions, are discovering the value, of minority clientele.

• Author: Westby, Tim

LATINOS make up Utah's largest minority group, and the community's population growth shows no sign of slowing. For Hispanics, this means greater opportunity to flex some economic muscle and receive more attention from commercial and retail lenders. However, while Utah's financial institutions say they are doing a better job of meeting the needs of Latinos--especially Hispanic business owners--they also concede there is still work to do. "I don't think we're quite there yet," says Stan Nakano, district director for the Utah office of the Small Business Administration. "I think there is more we can be doing."

That feeling seems to be penetrating leading institutions nationwide. According to a recent survey by the American Bankers Association, two-thirds of the nation's banks will increase their marketing budgets this year. One of the key drivers behind that increase will be a push to market to minority communities.

The survey found that 47 percent of banks market to minority ethnic groups currently or plan to this year. A report by the Bank Administration Institute released about the same time as the ABA survey seems to support, at least in part, why going after the minority market might be a good idea. According to The Revenue Growth Challenge in Retail Banking, the majority of the nation's largest banks are unlikely to meet their retail revenue growth goals despite a rebounding economy, while smaller banks as a whole are likely to grow faster than larger banks.

Although the ABA did not break down its survey numbers on a state-by-state level, the national numbers seem to mirror trends here in Utah. Washington Mutual, for instance, has made a 10-year, $375 billion commitment to low- to moderate-income and minority communities nationwide. In Utah, that translates to more than $13 million during the first nine months of 2003 in small business loans to various minority groups including women and the disabled, according to Washington Mutual spokeswoman Olivia Riley. But like many bank officials, Riley agrees her company needs to do a better job serving Utah's Hispanic community. "We need to increase our Hispanic employee base, and we will be hiring more Spanish-speaking employees," she says.

Census numbers make it clear why banks, credit unions and other lending institutions are scrambling to break into Utah's Hispanic community. For at least the last decade, Utah has experienced robust growth in Latino populations. The 2000 census pegged Utah's...