THE
UN -
BEARABLE
COST
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BEING
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BANKED
2 years
9 years
14 years
7 years
5 years

When Hispanic immigrants come to the United States, they often operate outside traditional financial institutions. Many become targets of predatory practices and crime.

But one regional credit union in the Deep South is looking to break this cycle—and transform lives—one transaction at a time.

On most weekday mornings, Mike Ramirez drives to the Hope Credit Union location on the frontage road off Interstate 30 in Southwest Little Rock. In the same parking lot there’s a Mexican restaurant named El Chico with a big sign that you can see from the highway. Next to it, one hardly notices the tiny credit union. One hardly notices Ramirez, HOPE’s manager.

Ramirez looks and dresses like a candidate for local office, his blue suit shining just a little bit in the early light. He carries himself like a candidate, too, like he’ll happily stop and listen to your story, and if you have time, he’ll tell you his own, in a molasses Arkansan drawl.

After he parks, he heads inside, unlocks the vault, and oversees his staff as they get to work. The lobby begins to fill with customers. Minivans and pickup trucks crawl through the drive-thru. Ramirez’s phone on his desk rings, then a cell phone in his pocket.

Ramirez’s life—good career, three healthy kids—is the culmination of his family’s long-held dream. His parents migrated from a pueblo in the mountains of Guerrero, Mexico, to the United States in the late 1970s. Eventually, they settled in a small Arkansas town. Mike watched them struggle to not only gain a financial foothold but a feeling of security—of belonging. He watched his mother teach herself to read with the family Bible. When they were still kids, Mike’s mother used to leave him and his brother at home watching cartoons while she worked in the poultry-processing plant around the block. She would come back to check on them during her breaks.

“I always liked the banking setting because it was just people helping people. People go to banks because they have a need. I think I’ve always had that in me to help people and that’s really what led me to banking.”
Mike Ramirez

The long journey his parents took to finding home in Arkansas is not lost on Ramirez. Neither is the fact that many of the people he encounters at work are in the earlier stages of their similar journeys. In fact, these people are the reason Mike left his job at another bank to work at HOPE. The phrase he likes to use, the one that he always comes back to, is “people helping people.” But it’s also more than that: HOPE is a nonprofit credit union that focuses on supporting, not exploiting underserved communities (the official term for this is a “community development credit union”). In the case of Ramirez and the Southwest Little Rock location that often means immigrants from Mexico and Central America, many of whom are undocumented.

To an undocumented person, a simple checking account can feel hopelessly out of reach. According to the FDIC, 14% of Hispanic households are unbanked or underbanked—a full 10% more than white households. And that number does not even take into account the many undocumented households that typically go uncounted in these kinds of surveys: Families that intentionally fly under the radar because they fear that by exposing themselves to government institutions, they could become targets for deportation.

Many underbanked people rely on payday and predatory lenders when they need cash; many more hold their cash on their person, which is physically dangerous.

Fear is only one of the obstacles standing between many families and banking. There are also language barriers, and the knowledge gap: When you are making your way in a new country, learning the ins and outs of a complicated financial system is rarely a high priority. This is especially true for people coming from places where banks were inaccessible or unstable. According to the Economist, “in America, 23% of households headed by a non-citizen, and 35% of households where only Spanish is spoken are unbanked—compared to 8% for the population as a whole.”

As a result, many underbanked people rely on payday and predatory lenders when they need cash; many more hold their cash on their person, which is physically dangerous. As the Latino population and the undocumented population have risen in Southern cities like Little Rock over the past two decades, immigrants have become targets for armed robberies and burglaries. With money under the mattress, or wadded up in their pockets, they became known as “walking ATMs.” And in Southwest Little Rock, that danger has not been an abstraction.

While the first benefit of becoming "banked" is personal security, the rewards that follow can be exponential: It’s knowledge, it’s the potential to build wealth and build a life.

In America, 35% of households where only Spanish is spoken are unbanked—compared to 8% for the population as a whole.”

The Economist

Hope Credit Union is not a religious organization, but it did start in a church. In 1994, a social entrepreneur named Bill Bynum partnered with his pastor in Jackson to charter the credit union as an alternative to the predatory lenders that plagued the surrounding community.  They began signing up members after Sunday services. Now, HOPE is a community-development financial institution with assets of $470 million, serving over a hundred thousand people every day across the south. While the capabilities of the credit union have changed dramatically, Bynum believes the mission remains unchanged: Ultimately, it’s about extending responsible financial services and economic opportunity to people who don’t have them.

You have to engage. You have to live where they live, work where they work, buy where they buy, eat where they eat.”

“I'd like to think of us as private bankers for underserved, economically distressed people and places,” Bynum says. “Middle income and wealthy people have private bankers, they have relatives who are accountants or attorneys or financial managers who can help them navigate problems and challenges that they’re trying to solve. When people don't have a lot of wealth, when they’re maybe the first person in their family to go to school or to own a home or to start a business, they don't have that network to tap into. So we play that role.”

To do so, HOPE has to be visible in the communities it serves: It has to be on the radio, present in local business, and in places of worship. Until recently, that meant mostly African American and rural white communities. Starting in 2012, HOPE began to hear from Latino groups in Mississippi that they felt they were not being served well by traditional financial institutions, and began to hire more Spanish-speaking tellers and office staff.

“What I tell people is that if you really want to be known, and represent Hispanic people, you have to engage,” says Ramirez. “You have to live where they live, work where they work, buy where they buy, eat where they eat.”

This was the kind of presence that helped Ramirez’s family send him to college. He saw how, as his parents established themselves, they became a resource for other members of the Latino community. Banking was deeply interconnected with everyday life: It was a part of everyone’s business, whether farms or restaurants. And the relationships they formed extended beyond the walls of the building, webbing out throughout the neighborhood.

ITIN
noun
1.
A don't-ask-don't-tell solution that allow the IRS to collect taxes from undocumented immigrants, and allows financial institutions to access their histories so they can open accounts.

One HOPE member, Carmen Cavazos, shared her story about when she and her husband came to Little Rock from Mexico. When they walked into HOPE for the first time, they were upside down on a car loan, paying 17% interest on an old Suburban that no longer ran. With Ramirez’s help, they were able to obtain a cheaper loan to pay off the Suburban, and begin payments for a working truck. They built credit, and eventually bought an acre of land and a large mobile home.

HOPE’s membership is full of these transformational stories.

Take Byron, who came to Little Rock from Guatemala in 2000. He was 18 years old. He worked construction, held onto cash, and saved everything he could. He learned English and settled into life in Arkansas. He remained undocumented. For many years, he was exactly the kind of person who is targeted in walking-ATM assaults. But finally, he managed to open a bank account by using his passport to obtain an Individual Tax Identification Number, or ITIN. ITINs are a don’t-ask-don’t-tell solution that allow the IRS to collect taxes from undocumented immigrants, and allows financial institutions to access their histories so they can open accounts. ITINs are protected from immigration officials, but holders aren’t eligible for government benefits like Social Security. Many banks accept ITINs for opening checking accounts or for simple credit cards, but HOPE has made a specific effort to reach out to ITIN holders like Byron, and to offer a wider variety of financial services to them.

When people don't have a lot of wealth, when they’re maybe the first person in their family to go to school or to own a home or to start a business, they don't have that network to tap into. So we play that role.”

Bill Bynum, CEO of HOPE

As demand for Byron’s landscaping services grew, he began to run into challenges that were a direct result of his undocumented status. For instance, he could get a car loan, but not a business loan. He found that banks were more willing to lend him money for a car, because if he failed to make payments on it, a car could be easily repossessed. This was not the case for business expenses. Ramirez brought him into HOPE, and Byron was able to get the business loan he needed to get a third landscaping crew started.

“It’s good to help those who need it because not everyone has the same opportunity to communicate.”
Gustavo Jerez and Maria Mercedes Salinas

The church where Byron and Ramirez met is an Assembly of God congregation called Centro Cristiano of Little Rock. It’s also where Ramirez met Benjamin Salas, who, along with his brother Federico, own La Regional, a landmark of Latino Little Rock.

The Salas brothers came to Little Rock in the late 1990s and soon noticed that there weren’t enough stores serving the city’s growing Latino population. So they decided to open one themselves. They rented a storefront in a strip mall on Baseline Road. They called it La Regional. When they moved in, there were five little units in the strip mall. Slowly, La Regional began to expand. Within a decade, the Salas brothers owned the whole building, plus the two adjacent properties.

Working with HOPE, the Salas brothers were able to first get a loan to make up the difference, and then begin to think of the fire as an opportunity.
Working with HOPE, the Salas brothers were able to first get a loan to make up the difference, and then begin to think of the fire as an opportunity.

Then, in February of 2017, a walk-in freezer in their bakery short-circuited. The entire building burned down. Their insurance didn’t cover the complete cost of constructing a new place. Working with HOPE, the Salas brothers were able first, to get a loan to make up the difference then, to begin to think of the fire as an opportunity. They could rebuild in a way that maximized their most popular services: the bakery, restaurant, and butcher shop. Now, the new building is complete, big and spacious, and painted in bright colors with a full industrial bakery and a restaurant.

Standing on Baseline Road with Federico Salas, you get the sense of possibility. You get the sense of a community coming into its own. But for every La Regional, there is a business that is fading because it cannot access credit; there is a person hiding their cash in a coffee can in the freezer.

This is where the work of actual community outreach pays off. It’s not just about eating where members of the community eat or seeing them at church, but also catering to nontraditional clients as customers—it’s about understanding why your client hides cash in a coffee can, why certain folks might not trust that financial institutions have their best interests at heart. When Ramirez’s office phone and his two cell phones are ringing, they are generally ringing with stories. The fact that many members don’t have much to offer in terms of collateral is built into the company’s business model.

“Every transaction, every request, is a one-on-one, distinct interaction,” says Bynum, the CEO. “It may be a little more labor intensive, but taking the time to understand the ability to pay is core to making a loan decision. Getting people into an account that addresses their particular needs and helping them to grow as they are able to accumulate and save a little bit of wealth. ...It’s an investment on our part that many other financial institutions don’t make unless a borrower meets a certain income or geographic profile.”

The point isn’t that you can help every single person, it’s that you can help one person.
The point isn’t that you can help every single person, it’s that you can help one person.

Not every loan is approved; not every potential member decides that financial services, or the specific financial services HOPE is offering, are for them. But being present, being trustworthy, being part of the community does make a difference. The point isn’t that you can help every single person, it’s that you can help one person. That’s how it was for Ramirez’s own family. And it may take time to catch on. But, as Mike would say, it’s “people helping people,” and it works.

Hope Credit Union’s mission is to strengthen communities, build assets and improve lives in economically distressed areas of the Deep South by providing access to high-quality financial products and related services. Learn more about their programs here.
Photography by Emerson Collective
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