Study examines Hispanics' financial literacy

The level of financial practices understanding and the financial status of the Hispanic population in the central San Joaquin Valley is being researched by the Center for Economic Research and Education of Central California at California State University, Fresno.

Wells Fargo Bank granted $60,000 for the 10-month study, “Assessing Financial Literacy among Hispanics in the California Central Valley,” which began in September. The College of Social Sciences at Fresno State also contributed $10,000.

Economics professors Dr. Antonio Avalos and Dr. Janice Peterson direct the study. Avalos also is the research director of the economic research center, a unit of the Economics Department in the College of Social Science. Peterson is the center’s director of education, conducting workshops for local teachers and introducing new curriculum materials.

The study aims to gain better understand budgeting, spending, saving, loans and credit, financial and retirement planning, investment and other financial practices among Hispanics in the region.

Avalos said results will help the financial services sector better appreciate customers’ needs, avoid inappropriate use of products and inform education, regulatory and social policy about the need to improve financial skills for consumers.

“Specifically, the study aims to produce information useful to Wells Fargo and other banking and financial institutions in California, particularly those serving regions with similar demographic characteristics to those of California’s Central Valley,” he explained.

Avalos noted there is anecdotal information about finances of the 1.3 million Hispanics who live in Fresno and five neighboring counties. However there have been no studies about how such factors as language, immigration status and cultural experiences affect Hispanics’ ability to take advantage of information, resources and products available through the financial system.

Avalos said, “it is well known among participants in the financial system that many Hispanics don’t trust banks and, thus, don’t use checking accounts. ” He added that many Hispanics finance autos, homes, furniture and other major items without understanding the terms and documents they are signing.

The Bank on California and California Bankers Collaborative initiatives are potential users of the study’s findings. The first is a state, federal, community, regulatory and business effort focused on helping people who don’t use banks or don’t have them available. The second is an alliance of banks and federal regulators trying to reduce poverty affecting low- and moderate-income populations through community development.

Fresno has been chosen as one of the collaborative’s pilot cities. It is the first to review such

issues as expanding capital investment in affordable housing and community-related real estate
projects, increasing family income and wealth, simulating job retention and job creation and supporting healthy environments and lifestyles.

The study will include a bilingual telephone-based survey, analysis of financial data status and an assessment to determine the impacts of income, age, gender, schooling levels, English-speaking ability and other socio-economic and demographic characteristics of the Hispanic and non-Hispanic population in the region.

Avalos said a final report is expected to be ready in June 2009.