Chinese-American banks provide financial support for San Gabriel Valley, Los Angeles
Posted: 11/27/2012 07:52:35 PM PST
Updated: 11/28/2012 10:14:32 AM PST
Gallery: San Gabriel Valley has become the New Chinatown, nicknamed "Asian Wall Street"
When Cathay Bank, under the leadership of the late Wilbur Woo, opened a small storefront in Los Angeles' Chinatown in 1962, it offered financial services to a Chinese-American community that couldn't find them anywhere else.
Woo died last week in his Monterey Park home at 96, but his role as a founder of the first Chinese-American bank lives on in the flourishing "Asian Wall Street" of Los Angeles County.
"I think it gave him a great deal of satisfaction to know that he could play a role in obtaining a loan for someone who otherwise would lack the money to be a success on their own," said Woo's son Michael Woo, a former Los Angeles city councilman and dean at Cal Poly Pomona. "In the early days, many of the Chinese-American customers were skeptical if they could get a loan from an American bank."
Fifty years later, Cathay Bank has become one of the most prominent financial institutions in Los Angeles County, Woo said.
But now it has a lot more company.
The National Association of Chinese American Bankers, with the majority of its 80 members located in Southern California, just celebrated its 25th anniversary, and the California Department of Financial
Henry Li, marketing director for Cathay Bank, said Chinese-American banks help attract new, often wealthy, immigrants from China who feel more comfortable using a bank where staff members speak several dialects of the Chinese language.
Many parents also send their students to schools in the area, Li said, because they can easily transfer money to their children's bank accounts.
"I think Los Angeles is still a booming town because the influx of all the new immigrants," Li said. "We are seeing a lot of new immigrants from China who are pretty well-off. ... We notice some of the new immigrants from Asia, before they even come to the U.S., they do their homework and ... open accounts with us even prior to coming to Los Angeles."
And, said Assemblyman Mike Eng, D-Alhambra, even for Chinese-American residents that have settled and established businesses, the banks often help ease the cultural transition from east to west.
"The Chinese banks have really provided options to the Asian businesses," Eng said. "It allowed them to have more access to community banks that spoke their own language, that sent representatives into their community who (they) probably attended church with, or were in the Rotary Club with."
It's not just the Chinese community that feels at home in Chinese-American banks.
Many cities see them as part of the local community, and most banks are registered American companies. Alhambra's former redevelopment agency, for example, had a line of credit with a local Chinese bank.
"Typically the decision-makers are local as opposed to having to deal with someone in an ivory tower in their national headquarters," Alhambra Chamber of Commerce President Mark Paulson said. "You are dealing with a local institution and they know better the local economy, and it's much easier to deal with. When you say `Chinese bank,' you're not dealing with someone in China or Taiwan. Typically, the local directors, they are all right here."
The banks' presence in the Los Angeles region is not an accident, nor is it limited to the local banking needs of a minority community, said Baizhu Chen, a professor at the University of Southern California Marshall School of Business.
The banks, he said, are essential to the local and nationwide economy because they help facilitate the large volume of trade flowing in and out of the ports of Los Angeles and Long Beach.
"Los Angeles is the gateway for America to do business with Asia. It is also a gateway for Asia into North America as well. ... The community banks are the natural bridge between this community in Los Angeles doing business with China," Chen said. "The banks provide liquidity, it's like the blood of the body, without the blood the body will not function. ... You have the finance coming from the banks to facility the buy and sell."
The banks and their employees have also helped bring Chinese money into the region through the federal government's EB-5 Immigration Investor visa program, which grants permanent residency to foreign investors, said Jordan Levine, director of economic research for Beacon Economics.
Many developments in Los Angeles County have been built with these foreign funds.
"They are basically all new money coming into the U.S. that wouldn't otherwise have come here in the absence of EB-5," Levine said.
Chinese banks also drive Chinese tourism to the Los Angeles area, he said, giving visitors easy access to their money.
"I know Chinese tourism through the airports here in California has been going up remarkably," Levine said. "It's not just business travelers scoping out investments but also folks coming out here for holidays."
These "new money" sources, along with the banks' other financial roles in the community, have helped the local economy weather the 2008 recession, said Robert Kleinhenz, chief economist for the Kyser Center for Economic Research.
"I think that's an important source of capital for those communities right now," Kleinhenz said. "Many of them fared better during the recession than other parts of L.A. County. I think there was something unusual that helped those communities and that certainly could be the capital coming from China."
From the "New Chinatown" to "Asian Wall Street," the Chinese-American community that surrounded Wilbur Woo when he died this month is a world away from the San Gabriel Valley he entered as one of the first Chinese immigrants to move to Monterey Park.
"He led a long rich life for 96 years and came a really long way from being a boy who immigrated here at age 5," Michael Woo said. "I think there were challenges in the beginning, I think there may have been some skepticism that a bank owned by Chinese Americans would have a large enough potential audience. But it turned out to be a good bet."
Funeral services for Woo will be held at 11 a.m. Dec. 1 at Rose Hills Memorial Park, 3888 Workman Mill Road, Whittier.