HispanicBusiness

LA PRENSA, Calif.--$452 billion. $23 billion. $9 billion.

The numbers are hard to ignore. That's why American financial institutions are increasingly focusing on what many see as a potential growth opportunity: newly arrived immigrants.

"It is the next customer," says James Ballentine, director of community development for the American Bankers Association. "It is the customer base banks are looking at now and in the future."

Consider this:

-- The buying power of Hispanic consumers in this country is estimated at $452 billion.

-- Each year, immigrants transmit $23 billion to relatives and friends in Latin America and the Caribbean.

--The $9 billion sent from the United States to Mexico last year was the country's third largest source of revenue behind oil and tourism. The numbers are expected to grow as immigrant populations in the U.S. increase and more American banks and credit unions allow the newcomers to establish checking and savings accounts using their national identification cards.

Every day in San Bernardino, the Mexican consulate hands out about 120 matricula consular ID cards to mostly undocumented immigrants who cannot get any other form of identification.

For Luis de la Cruz, 22, the matricula card means not having to put his paycheck under the mattress or in someone else's bank account.

"I used my brothers account ... to manage my money," said the Fontana resident. He said he is tired of managing the money under his mattress.

Bank of America last month joined a growing list of American financial institutions that want to make it easier for immigrants to send money back to their native countries and to open traditional savings and checking accounts.

BofA, the nation's largest bank, unveiled SafeSend, a new service that will allow customers to transfer money to Mexico via the Internet, ATMs and telephones.

The bank also began accepting consular ID cards to open checking and savings accounts.

Ismael Sanchez, 31 a Fontana resident, once opened an account at BofA by showing his Mexican passport. But the bank stopped accepting that document, he said, so he had to close his savings account.

On Thursday morning, Sanchez, a welder, got his consular ID from the consulate to open an account. A couple of hours later, he had opened a savings and checking account with Wells Fargo.

"I need to have control of my paycheck and this account will help me," he said. "It feels good that now I can have access."

BofA and other large institutions want to take a bigger bite out of the foreign remittance business that is dominated by Western Union and Moneygram. To get the word out, BofA has expanded its minority marketing.

The bank said it will spend $40 million this year to attract customers from Hispanic, African-American and Asian communities. That is up from $10 million a year ago, said BofA spokeswoman Gillian Breidenbach.

Credit unions are also about to jump into the international remittance business in much bigger way. Pending legislation in Congress would allow credit unions to offer popularly priced wire transfer services to non-members. Many credit unions cannot offer the service to non-members unless they set up a special subsidiary called a credit union service organization, or CUSO.

Credit unions will soon have more places to where they can send customer funds. Starting next month, Banco Del Ahorro Nacional y Servicos Financieros, a Mexican government agency that assists credit unions, will link about 1,000 Mexican credit unions with their counterparts in the United States.

U.S. credit unions already wire money for their customers to Mexican banks. But the new arrangement would allow them to transfer funds to mostly rural institutions.

"A majority are in the western states of Mexico where most of the immigrants (to the U.S.) come from," said David Grace, financial service manager for the World Council of Credit Unions, a Wisconsin-based trade group.

Arrowhead Credit Union in San Bernardino has been offering money transfers to Mexican destinations for about two years, but volume has been low.

"We are not going to replace Western Union," said Maurice Calderon, senior vice president of community development.

Last year, the Inland Empire's largest credit union handled about 150 transfers to Mexico valued at about $70,000. In the three months of 2002, however, it processed 82 transactions worth about $60,000.

Calderon attributed the increase to growing acceptance of the matricula ID card and the credit union's transfer fees. For $8, the credit union will send $1,000 to a bank in Mexico. But the customer ends up paying about $17 because of costs associated with currency exchange rate transactions.

Over the past two years, the average wire transfer fee for money sent to Mexico has dropped from $25 to $15 as competition for immigrant customers intensified. Some credit unions charge less than $7 to send remittances.

Despite the inroads by banks and credit unions, 41 percent of senders use traditional wire service firms, Western Union and Moneygram, according to Inter-American Development Bank.

Banks and credit unions hope the growing acceptance of matricula cards and more economical wire transfer fees will at least get "unbanked" immigrants through their doors.

"Just them walking into the institution is breaking down one of the biggest barriers," said Ballentine.

That first visit may be be just to send a remittance. But somewhere down the line, the visit may lead to a mortgage loan or credit card.

Historically, immigrant groups have not trusted banks or financial institutions, preferring to keep cash under the mattress.

That means they do not have access to affordable credit, rely on check cashing businesses that charge 1 percent to 10 percent but average 2.5 percent and are more likely to be robbed because they rely on cash, said Grace with the World Council of Credit Unions.