E-mail a friendMaria Contreras-Sweet
airdate August 30, 2007
Maria Contreras-Sweet is used to being first. She was the first Hispanic female member of a California governor's cabinet—Secretary of Business, Transportation and Housing—and founder and chair of the first Latino-owned bank in California in more than 30 years. PROMÉRICA is a full service commercial bank, specializing in serving the small business community and Hispanic entrepreneurs. She's also founding president of Hispanas Organized for Political Equality and influences a wide range of public policy.
Bank founder says, "the only difference between a sous chef and a restaurant owner is access to capital." (1:08)
Full interview. (10:23)
Maria Contreras-Sweet
Tavis: We continue our "Road to Wealth" series tonight with Maria Contreras-Sweet, founder and chairwoman of Promerica Bank. Promerica is the first Latino-owned bank to open here in Los Angeles in the last 35 years. Prior to that, she was the first Latina to hold a cabinet-level position in California as secretary of business, transportation and housing. Maria, nice to have you on the program.
Maria Contreras-Sweet: Thank you, Tavis. I'm so excited - you're a legend.
Tavis: Oh, please, I'm just a brother trying to get paid on PBS.
Contreras-Sweet: Oh, no, no, no.
Tavis: No. Speaking of money, I was shocked to realize that this is the first bank to open in L.A. I could see if you'd said Indianapolis.
Contreras-Sweet: Nebraska or something.
Tavis: Nebraska. But the first bank in 35 years in California? In L.A.?
Contreras-Sweet: Isn't that horrible?
Tavis: Yeah.
Contreras-Sweet: We actually did quite a bit of research to make sure that this model made a lot of sense, and Asians at the time had about 27 Asian-oriented banks. Of course the Italians, Armenians - everybody's got their banks. And Latinos - in the state of California, there were two. Two. One in San Diego and one that was formed many, many years ago up in the northern area. So it was long overdue.
Tavis: Is that a statement about the Spanish-speaking community or a statement about the rest of us?
Contreras-Sweet: Maybe a little bit of both. In terms of the liquidity, what it takes to go through the labyrinth of government. You have to give your blood. The application process is enormous, the capital you have to put up. So it's a very, very long, arduous process.
Tavis: What does the bank mean, in short order, for Spanish-speaking people in the state of California?
Contreras-Sweet: I think for everybody what it means is that this community bank is owned by the community - that's number one. I think that's really important to say. We're not institutional-owned, we're not owned by somebody out of state. Los Angeles, the community, owns this bank. We made sure that we were more than 60% minority owned, of all backgrounds, and that's what I love most, is that the community came together to build their own bank.
And what that means now in terms of operationally, it means that the community can come in and say, “I have a bank where people know me,” where anybody who walks into the door, we take the time to get to know them as opposed to applying some formulaic formal process with your FICO score. What we say is, “Get to know us, and we want to get to know you.”
Who's your family? What are you about? What's your future? Where are you going? Let us help you write a business plan. Because we know that if you own your business, you can become empowered to finally leave your family a legacy. So many of us people of color, we've worked for everybody else, and we haven't taken the time to start our own business.
And so at the end of 30 years, working for somebody else, what do we leave our children? So -
Tavis: And yet here in California specifically - and I think this is probably true around the country - we think of - certainly Mexicans here in California, we think of Hispanics, Latinos across the country, we don't think of them - let's be honest about it - as entrepreneurs. We think of them as workers.
Contreras-Sweet: And ironically, Latinos are so entrepreneurial. Because when you think about it, from day one, we're selling something. We're trying to sell you something, right? (Laughter) And so we have learned that - I worked on the federal glass ceiling commission for years and years and years. Earl Graves and I were assigned to that commission and we held hearings across the country.
And what we heard is actually that minorities are extremely entrepreneurial. We'll take one job, we'll take two, we'll take three. And you put that together and what it means is that we know how to expand our household income, and given a chance, Tavis, the only difference between somebody who is a sous chef and a restaurant owner is access to capital.
And so if you give a person access to capital, they can begin their own business and then start ownership. And you expand the middle class that way. A community bank is a really empowerment engine.
Tavis: And yet that's a big if, because - and I've said many times in speeches across the country about this very issue - that I own a business, I'm a capitalist. The only thing wrong with capitalism, I say all the time, Maria, is that they get the capital, and we get the ism. The racism, the sexism, the cronyism. So nothing wrong with capitalism.
They get one part, we get the other part, and the rub against Black and Brown businesses, or for this conversation Brown and Black businesses, the conversation is about the fact that we don't have access to that capital. How is that reality changing?
Contreras-Sweet: Well, at Promerica the reason it's changing is, again, we invite people in. I've been involved in California for 100 years. I know many of the families; I'm involved in the museums, in the chambers, in the small business organizations in all of the sectors. And so usually instead of six degrees of separation, I can usually get to two degrees of separation.
So I usually find somebody who knows you who is going to tell me a little bit more about you. And it's because of that that I feel a higher level of confidence in making you a loan. I know what your energy level's about, I know what your children are like, what your spouse is gonna be like. And so I have a higher level of confidence.
That's how Bank of America was built. It was built because the Italians in San Francisco felt that the New Yorkers did not understand them. And so what they did is they built a bank for Italians and they understood each other and knew each other and knew that they could find each other if they didn't pay the loan. That's the model that we're replicating today. We're saying we know people who are gonna find you if you don't pay the loan.
Tavis: How much - and there's no scientific answer to this; I don't think there is, but I'm curious as to your point of view - how much business do you think is lost (unintelligible) the table by the majority community because they aren't interested in aggressively finding culturally competent ways in banking and other industries to serve people of color?
Contreras-Sweet: Oh, well, it's gotta be enormous - it's gotta be enormous. I came out and pulled together - as an example, I'll just give you my personal example. I put a million dollars - do you know what it was for me to collect, from friends, family, to start this bank? I put a million dollars into a large money center. It wasn't even a blip.
I didn't get a call, I didn't get any special service, it was just the same old, same old, same old. If you put a million dollars in to Promerica bank as a deposit, we would jump every time you walked in, do you know what I'm saying? The idea of a community bank is just so much more fulfilling, it's more engaging. And then to take it to the next level, what we did is we created a center that we called the Center of Success so that it's not just about having a depository and a lending relationship.
But then what are the other things that we need to be successful? We need to know more about banking services. What are the cash management services I ought to be considering? Do I need an IOLTA account if I'm a lawyer? Do I need a sweep account at night to put my cash in since I'm so cash-heavy? To put it in at night so that it generates interest?
Those are not usually the conversations we're having with our bank. And so what we're saying is, we wanna create a model that's very much like the health care model. In our model, you don't wait till you're dying (unintelligible) go see the doctor. What you do is you establish a proactive, preventive healthcare model with your physical health.
You know to go see your doctor to get your annual shots, your flu shot. Likewise, we say go to your bank to establish a proactive relationship so that when you need capital to expand your business, you have the relationship in place.
Tavis: I hear the creativity that surrounds why it is and how it is that you came into business, and the unique service that you provide. But how do you compete? How does a bank like this, for that matter, Brown or Black - I know some Black banks; One United, around the country. How do you compete against these major institutions?
Contreras-Sweet: It's actually pretty easy.
Tavis: Yeah. Wow. (Laughs)
Contreras-Sweet: No, I'm serious. We don't have the big advertising dollars, so that's the down side. I don't have - I can't go into an organization and say, “I'm going to sponsor your event with $500,000.” So that's the disadvantage; that's the reality of our size. But on the up side, when people come in and they see that they can see the chairwoman, that they can see the president, and most important that we can turn on a dime, that we can give them an instant response, that we don't have to call some other office in Nebraska or somewhere else.
That we can pick up the phone and we can say, “We've got you covered,” and we can give them a response in short order - an hour, sometimes - that is worth everything to somebody. A long, long maybe gets you nowhere. A specific example I'll just give you - there was a nonprofit group that was just recently - they started building their construction - their medical center.
And they were told that they were gonna get a loan, but it was tomorrow, tomorrow, tomorrow. Four months of tomorrow. And finally someone said, "You ought to call Promerica." They called us and we turned it around in a week and gave them their construction money so that their project was able to be completed on time and they were able to take care of their services; their patients. That kind of story, you just replicate that every day - it's worth gold.
Tavis: Now, you read the same papers I read every day. You do realize that the big boys, the big banks are in trouble now because they gave out a bunch of loans to people - we're told, at least - who couldn't afford to pay them back, and hence the housing market being in the trouble that it's in. So how do you know that even though you know how to find person X, Y, or Z, that they're good people to lend to in terms of getting your money back?
Contreras-Sweet: Yeah, number one, again, I don't know that the analysis is so different. When you're taking out a mortgage loan, maybe it's your first home and so they lead you and tease you with these very low starter interest rates. And then later they ratchet it up and some (unintelligible) forward and sometimes the marketplace doesn't keep up with what you expect is gonna take place on the value of your home.
In our instance, we're a business - we're a commercial bank. And so we're making loans to small businesses, so we haven't been exposed as much as the other institutions because we haven't been making the mortgage loans that they have. So that's why right now actually Promerica has a huge advantage, because we're not vulnerable.
We don't have to write off any loans, we haven't been doing the mortgage lending that others have, and so that's one huge advantage that we have. Second, again, I find that when we go in and we say, “We're going to guarantee your loan with an SBA so they're federally guaranteed;” that's a huge advantage for us because the government stands behind the loans that we're making.
Tavis: I love these stories. It's not often on television that we get a chance to see these kinds of stories profiled about everyday people in communities of color doing what they can to provide culturally competent service to people who make America what it is today, but Promerica Bank is an example of that, and Maria Contreras-Sweet runs that operation. It's an honor to have you on the program.
Contreras-Sweet: Thanks so much, I look forward to (unintelligible) some more.
Tavis: I'm glad to have you here.
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