Bank raises profile with Hispanics
The Denver Business Journal - April 22, 2005
by Tom Locke Denver Business Journal

Omaha-based Commercial Federal Bank is making new moves to attract Colorado's growing Hispanic
population -- and so far the effort appears to be working.

Although it still has a long way to go before it catches market leader Wells Fargo, Commercial
Federal's share of the Hispanic market in the Denver Designated Market Area (DMA) roughly
doubled to 7.9 percent from 4 percent while other survey-listed banks have had a decline in market
share or stayed the same among Hispanics.

That's according to year-long surveys that ended in August 2003 and August 2004 that were
conducted by New York-based Scarborough Research. The later survey indicated 33,165 Denver
DMA Hispanic adults use Commercial Federal as their bank, double the 16,520 of the year before.

"It's beginning to look like an uptick," said Deirdre McFarland, vice president of marketing for
Scarborough.

Commercial Federal's numbers show that adult Hispanics in the latest survey are "eight percent more
likely to bank at Commercial Federal," McFarland said, when compared with all Denver DMA adults. In
the previous survey, Hispanics were 12 percent less likely to bank at Commercial Federal compared
with all Denver DMA adults, she noted.

Based on the sample in the latest survey, the Denver DMA has 418,330 adult Hispanics (18-plus) out
of a total adult population of 2.6 million. The Denver DMA includes 47 counties in Colorado, nine in
Nebraska and six in Wyoming.

No other individual bank listed in the survey gained market share between 2003 and 2004 in the
Denver DMA Hispanic community, according to Scarborough.

Laura Castro de Cortes, who joined Commercial Federal in May 2003 as vice president and
director of Latino banking, is part of the reason for the bank's success with Hispanics. Under her
direction, Commercial Federal started developing products targeting the Hispanic market in October
2003 and started its advertising push for Hispanics early in the summer of 2004.

Part of her approach is to avoid direct translation of an English commercial into Spanish, preferring to
start from scratch in Spanish.

That enables Commercial Federal to rethink the entire ad from a cultural perspective. For instance,
the ad might include an emphasis on the extended family -- which is important in Hispanic cultures --
as opposed to American rugged individualism.

In addition, by starting from scratch with Spanish, an ad can use a play on words. For instance,
Commercial Federal has a tagline for two TV commercials that says "Cuenta Conmigo," which has a
double meaning of "count on me" and also "have your banking account with me." One of those ads
has images of grandparents and parents supporting a young man, "Jorgito," and stressing the
importance of the family.

Castro de Cortes, who is from Mexico's state of Chihuahua, also has axed a Spanish accent on an ad
if it didn't suit her Chihuahan ear. She estimated Chihuahua accounts for 80 percent of Colorado's
Hispanic population. It's Mexico's largest state, borders Texas and New Mexico, and includes Juarez,
across from El Paso, Texas. Chihuahua is heavily represented here because "an enclave develops
and those people bring in more people," Castro said.

Hispanics don't typically trust banks, she said, and they need to learn that the United States offers a
different system, with federal insurance on deposits. Financial education is key to Hispanics' building
wealth, she said, and Commercial Federal has created a free video explaining its services, including
how to use an ATM.

"We had one lady who came in with about $5,000 to send," Castro de Cortes said. "Who deals in
cash anymore? Latinos do."

Commercial Federal also has shifted its hiring emphasis to more Spanish-speaking tellers, bankers
and mortgage lenders, paying the Spanish speakers more for being bilingual.

Wells Fargo has top market share
Wells Fargo, which leads Colorado and metro Denver in bank deposits, also leads the Scarborough
surveys. It has the largest useage market share of any bank in the Denver DMA in both total adult
population and Hispanic adult population, according to the latest Scarborough survey. While the
survey shows an increase in market share among total adults, to 26.5 percent from 25.7 percent
between 2003 and 2004, it shows a decreasing share among adult Hispanics, to 24.9 percent from
28 percent.

Serving the Hispanic market has been an important part of Wells Fargo's business for many years,
said Cristie Drumm, Wells Fargo spokeswoman.

"We consider our efforts to be ongoing and ever-evolving," she said. "Our strategy incorporates the
location of our stores [branches], the development of our products and services, and our marketing
/community involvement efforts."

Among Wells Fargo's Hispanic-targeted programs are: Spanish-speaking bankers and tellers, with
more than 30 employees fluent in Spanish in metro Denver.
Wide branch distribution, with more than 60 branches throughout metro Denver.
Financial literacy, including an online program for money management developed by Wells Fargo at
wellsfargo.com.

Money-wiring service, teaming Wells Fargo with three Mexican banks with 4,000 branches and
10,700 ATMs in Mexico. A person with an account at a Wells Fargo bank in the United States can
send up to $3,000 to a person with an account at one of those three Mexican banks for $8.
Acceptance of the Matricula Consular card for identification.
A Latino loan program with a goal to lend $3 billion to qualified Latino business owners over 10 years.
According to the Scarborough surveys, FirstBank of Colorado, Bank One, KeyBank, and U.S. Bank
all lost market share among Hispanic adults in the Denver DMA between 2003 and 2004. Vectra Bank
and World Savings stayed even.

Castro de Cortes pointed to several characteristics that differentiate the Hispanic market, including
fast-growing Internet use, an attraction for bright colors and a young market. Citing the U.S. census,
she said the median age of the Hispanic market in the U.S. is 27.6 years old, versus 36.8 for the
non-Latino market.

Like Wells Fargo and some other banks, Commercial Federal is trying to woo the Hispanic market
partly through attractive money transmission services.

One of Commercial Federal's services is called
VanComFed, in which Hispanics in the United States
can send money to roughly 20 banks in 13 Spanish-speaking countries, including Mexico's
Bancomer. It costs only $6 for sending up to $2,800. The sender gets an 11-digit code, which is
communicated to the recipient to use when the money is picked up at the bank. Neither sender nor
receiver needs to have an account to use
VanComFed.

VanComFed launched without marketing on March 25, and the marketing launch began April 14 in
metro Denver, with TV ads on Univision and radio ads on KBNO.

Another Commercial Federal money transfer service is through the year-old Rapido card, which uses
two accounts. One is a free checking account in the name of the person transferring the money, and
one is a $4-per-month account in the name of the person receiving the money anywhere in the world,
as long as there is access to an ATM. Money put in the receiving account is withdrawn at an ATM at a
cost of $1.50 per withdrawal.

Some money-transfer companies make money from providing unfavorable exchange rates to
customers, but Commercial Federal's exchange rate is within 1.5 percent of the wholesale market,
Castro de Cortes said.

Commercial Federal isn't making money off the money transfer business, she said. "It's about
relationships. With Latinos, it's always about relationships."