AUSTIN -- Libertad Bank's business model, a hybrid of community bank and a check casher, was designed to cater to the growing Hispanic market in Texas.
Everything has been developed with Latin Americans in mind, said president and chief executive Ricardo "Rick" Chapa.
All the employees speak both English and Spanish. The sales brochures, so far only in Spanish (English-language material was at the printer Tuesday), not only explain Libertad's products but also tell how the Federal Deposit Insurance Corp. protects customers' accounts.
The $7.7 million-asset state savings bank, which opened for business in January, moved several blocks this month to a new office, at 1708 South Lakeshore Boulevard. A gran inaguracion has been scheduled for Sunday.
Mr. Chapa, a banker for more than 25 years, said Libertad offers services that many Hispanics want but most banks don't have: check cashing for noncustomers, for example, and Western Union money transfers, and prepaid phone cards at the teller window.
He said its strategy is to attract the unbanked with the kind of services they use and then move them into banking accounts.
The thrift has developed accounts "with training wheels," said Erik Beguin, its executive vice president of marketing and strategy. For example its Cuenta Sencilla, which means "simple account," has no minimum balance and includes a cash card, free money orders, and low-cost remittances to relatives in Mexico.
Mr. Chapa and Mr. Beguin said the Cuenta Sencilla can teach people who distrust banks and have little experience with them how the system works -- and since no checks are included, there are no overdraft fees to surprise them.
"The account is a way to get involved in banking and not get hurt," Mr. Beguin said. "As they get more involved, there is no problem moving up."
Banks around the country have started working to attract Spanish speakers who do not traditionally use banks. One is CheckSpring Bank in New York City, which started cashing checks at teller windows in hopes of moving cashing customers into bank accounts.
Libertad expects to show a profit in 18 months, Mr. Chapa said. It plans to put equal effort into Hispanic retail banking, general-market commercial banking, and residential mortgages.
Organizers hope to open a second office in the Austin market next year, and then a third, before expanding beyond the area, Mr. Chapa said. The thrift hopes to get additional investment by yearend to fund its growth ambitions, he said.
To market itself it is working with the nonprofit groups and is advertising through Spanish-language newspapers, radio, and television. Mr. Chapa said the long-term plan is to use word of mouth and community involvement to help it expand.
The community response has been very positive, Mr. Chapa said. "We have customers already 'advertising' our bank," he said. "I have one guy who already sent us five deals. He loves us."
Mr. Chapa came to Libertad from JPMorgan Chase Bank. There, he said, he realized how bad large banks are at marketing to Hispanics. Brochures were translated literally from English, he said, and many made no sense to Spanish speakers.
In addition, Latin Americans expect more personal service than Anglos do, Mr. Chapa said -- and they do not like to be rushed through the system.
