Bankers for Little Saigon Know Trust Comes First
More so than the typical start-up financial institution, the First Vietnamese American Bank faces an uphill climb.
The bank, which is planned in Westminster near Little Saigon, must find a way to earn the faith of an immigrant community that has a long and deep mistrust of the banking system. Some immigrants lost their savings after the fall of Saigon in 1975, when U.S. banks were seized by the communist government.
As Vietnamese immigrants arrived in the United States after the war, it was common for the new residents and business owners to stash their savings and profits in mattresses and refrigerators, or bury the cash in their backyards. The anti-banking culture even contributed to an upswing in home invasion robberies in Vietnamese enclaves such as Westminster.
Against that backdrop, Hieu Nguyen knows he has his hands full.
“For the Vietnamese, personal relationships and compassion are more important than anything else,” said Nguyen, 56, a Baldwin Park resident and the president and chief executive of First Vietnamese American Bank, which is to open this fall. “We’re hoping to use that to change the culture.”
In an effort to win over residents -- some who are still trying to get their savings back from U.S. banks that had branches in South Vietnam -- the bank will offer evening classes to teach potential customers about the banking system. They will also add a community meeting center that the public can use after-hours or on weekends.
At the dirt lot on Westminster Boulevard that’s the bank’s site, Nguyen envisions a business that’s a symbol of trust and community pride.
Banking classes, he said, will begin before the bank opens, starting with senior citizens at the Vietnamese Community of Orange County Inc., a nonprofit organization in Santa Ana that aids elders. Classes will use a program in Vietnamese that teaches about credit, personal budgeting and home loans.
Nguyen and a group of investors -- local doctors, business owners, other bankers and international investors -- have raised $1.3 million in seed money for the bank.
They have submitted an application to the state and need to raise $10 million to start the bank. The building will be leased from a developer.
Experts say banks have found recent success targeting ethnic communities.
“Their stocks have increased rapidly in the last year, and investors have become more aware of how well they’re doing,” said Don Worthington, a research analyst at Hoefer & Arnett, a stock brokerage and investment bank in San Francisco.
Two Korean American banks in Los Angeles -- Nara Bank and Center Financial -- expanded to New York and Chicago after successful launches.
Their success was attributed to obtaining deposits from a community that tends to save more of its income than the public as a whole and that operates many small businesses, Worthington said.
“It’s key to open a bank among the people you will do business with and have depositors that are very loyal and tend to keep decent-size amounts in banking accounts,” Worthington said.
But a major roadblock to opening an ethnic bank is being able to expand.
“Once you get to a certain size, you need to branch out to other sections of the community to keep growing,” Worthington said.
For example, he said, Nara Bank opened a branch in Northern California that is managed by and focused on targeting Indian Americans.
There are about 8,000 Vietnamese-owned businesses in Orange County, about 1,500 of them in Little Saigon -- fertile ground for an ethnic bank.
“Since 1975, when Vietnamese refugees landed on U.S. soil, the Vietnamese community has grown, prospered and evolved into an economically strong group,” Nguyen said.
But some remain leery.
Thuong Van Nguyen, 80, of Anaheim is among nearly two dozen depositors in Los Angeles and Orange counties who filed a lawsuit, still pending, against five banks that had branches in South Vietnam, including Chase Manhattan Bank and First National City Bank, to get back their money and the interest it would have earned over the last 29 years.
Thuong Nguyen said his fears of putting money in banks began in Vietnam after the communist government seized his $4,500 in savings.
After he settled in the United States in 1975, he opened a bank account, because gas, phone and electricity companies didn’t take cash, and buying money orders was costly.
“Now I leave money in banks, but I keep worrying about it,” Nguyen said. “What happens if there’s any earthquake? What happens if we are at war again? I keep thinking I should dig a hole in the backyard and bury my money. At least my children can always come back and dig for the money if anything happens, unless a bomb strikes.”
In 1998, a 73-year-old woman found wandering in Little Saigon was taken to a hospital for evaluation. Doctors at Pacifica Hospital in Huntington Beach discovered $26,000 in $100 bills sewn into her underwear. Another $10,000 was sewn into her hat. She told police she didn’t trust banks.
As word spread that money was being kept at home, so did home invasion robberies.
“Traditionally, people keep a pot of gold at home,” said Westminster Police Lt. Derek Marsh. “That is, for many years, the mission of home invasion robberies. Robbers heard about people keeping money at home; they’d grab four or five people for a crew and they went mobile. It was a crime of opportunity.”
Hieu Nguyen is confident that times have changed and is optimistic about the new bank.
“We’re confident this concept will appeal to the local community and business owners because it is created by individuals who have a deep understanding of the Vietnamese culture and the way Vietnamese Americans conduct business,” Nguyen said. “It’s a very complex group with different needs, and they’ve been underserved.”
