A Latinx MDI and CDFI working to provide great loan products in the southernmost tip of Texas
While we discussed the importance of Minority Depository Institutions in the article we published a week ago, we talked mostly about the importance of black banks. There is a long history of Black Americans in particular being excluded from loans from traditional banking institutions, but Latinx individuals are also much more likely than white applicants to be turned down when applying for a loan. Additionally, communities where the demographics skew to a majority of Latinx Americans, and where many of those individuals are immigrants, may have particular needs when it comes to banking.
Communities on the southern border of Texas are very likely to have high populations of Latinx Americans, and counties on the Mexican border are some of the poorest in the country, with 21 being designated as economically distressed areas. Many families choose to live on the border because they have family members who are unable to come to the U.S. living close to the border on the Mexico side.
Texas National Bank (TNB) serves six towns and cities in the southernmost tip of Texas with populations from 5,000 to 175,000. While the needs of each of these places vary depending on their size, all of them have a Latinx majority of at least 80%. TNB doesn’t just serve a majority Latinx population, making them an MDI; their board and their upper management are also majority Hispanic. This makes them much better equipped to communicate with their members who don’t speak English as their first language, and to be compassionate and patient with those members who have never banked before, as 16.2% of Latinx populations in the U.S. were unbanked in 2015.
While they’ve been open for almost 100 years, having started in 1920 as First National Bank of Mercedes (their hometown), TNB started to grow after changing their name before the financial crisis in 2008. They were then able to recover and continue their growth in the last five years, opening four branches and opening another later this year. In their about us section of their website, they emphasize hiring great employees and providing them with the resources they need to provide an intimate level of customer service, which helps them understand not just the needs of the community, but the individuals in that community. They also have a page of their website devoted to detailing their involvement in many community events.
Texas National Bank has earned both MDI and CDFI designations, as well as having earned as Satisfactory CRA rating. Twenty-seven percent of their lending is devoted to housing, and four-fifths of that goes specifically to low- and moderate-income households. Four of their six locations are in low- and moderate-income census tracts, and nearly 20% of their lending goes to small business loans, as well as 1% going to small farm loans. The only bad thing about this bank’s statistics is its net-loans-to-deposits ratio, which is only 68%, meaning only two-thirds of their deposits are going to lending. We would encourage them to increase this amount, as the amount they’re lending out now is being used effectively to improve their communities.
We would recommend this bank to anyone looking to invest in Latinx communities in the southern tip of Texas. They have both online and mobile banking options, so it’s possible for even those living far from this area to invest in this Better Banking Option. Check out their website to get started today.