first person Pedro Arce CEO of Veritas We Just Knock on Doors

Pedro Arce is chief executive officer of Veritas, a new bank in Lawrence, . He immigrated to Lawrence in 1970, joining the city’s supportive Ecuadorian community. After graduating from Greater Lawrence High School, he attended UMass, Amherst, earning two undergraduate degrees. He received graduate business degrees from University and Cambridge College. Arce was director of economic development for Boston-based nonprofit Nuestra Comunidad, a community development corporation, in between longer stints at Bank of Boston and TD Banknorth. He is positioning Veritas to serve the Lawrence community and its 70 percent Latino population and to participate from the ground up in develop- ment opportunities.

Textile mills, Lawrence, Massachusetts, 1941. A goal of Veritas is to be a devel- opment bank and help the former mill town flourish once more. Photograph: Jack Delano, courtesy of the Library of Congress

28 Summer 2008 You have experience in both priorities. For Veritas, Lawrence and urban How do you attract the unbanked? banking and community work? gateway cities are the priority. Easy: knock on doors. When I was at Bank Yes. I worked for Bank of Boston from of Boston in 1998, we were concerned 1990 to 2000, at Nuestra Comunidad com- How is Veritas Bank different? about being last in market share in Law- munity development corporation for a year Veritas is a for-profit, state-chartered savings rence. Although we did great projects in and a half. Then I went to TD Banknorth bank with a double bottom line: profitability Boston, we had no promotion budget for for 4-1/2 years. At Nuestra Comunidad I and social impact. It’s Latino because that’s Lawrence. One door I knocked on was supervised projects such as the kitchen in- what 70 percent of Lawrence is today. Most Lawrence Community Works, which was cubator, some technical-assistance and fi- of our board members are successful Latino not the premier CDC it is today. I arrived nancial-literacy programs, and our pushcart professionals. But immigration patterns at 2 p.m. on a weekday, and the doors were program. I packaged small business change, and we aim to serve all immigrants. closed. I thought, “The only CDC in town? and submitted them to or nonprofit We’re also a development bank. Individu- It should be abuzz with activity.” agencies for funding. I managed a neighbor- als, nonprofits, or municipalities can bring I became a board member, and we hood business-development center so orga- us ideas on community improvements. We brought in new leadership. Since then nizations doing similar work could collab- want to work on both the financing and the Lawrence Community Works has had an orate—Jewish Vocational Services, Urban early planning. impact on hundreds of lives through hous- Edge, This Neighborhood Means Business, ing projects, youth development, financial Acción, and so on. I’d noticed competitive- Are you interested in other literacy training, and more. I liked work- ness among some Boston-area nonprofits Latino locales? ing with LCW, and I hope that people who and wanted to enable more cooperation. We’re looking at East Boston and Chelsea, know me from there may one day come to For the kitchen incubator, we rented space but we won’t just focus on Spanish-speaking Veritas. from the Jamaica Plain Neighborhood De- communities. Framingham is high on our velopment Corporation, which owned the list, even though Framingham’s immigrants When you knocked on doors, did ideal location, Sam Adams Brewery. are predominately Portuguese-speaking. you speak Spanish? We’re also exploring Asian communities. Absolutely. We went on the radio, joined Did nonprofit experience enrich When we see distressed areas and no big nonprofits, got involved. We put a sign in your work as a banker? banks, we see opportunity. front of the bank, “Hablamos Su Idioma”— I think so. I always wondered how CDCs “We speak your language.” could accomplish all they did with so few Isn’t it difficult to attract But reaching the community is a resources. I value my time at Nuestra Co- unbanked immigrants? two-step process. It’s not enough to hire munidad, but I was ready to return to the Not really. Sometimes banks cite regula- Spanish-speaking tellers. You must give private sector and a bigger market. At TD tions as a barrier, but that’s an excuse. If you some of those hires decision-making author- Banknorth I was community development want to do it, you can. You need to bring in ity. Among the 11 people on our board, for manager for the whole state, working with products that match the community. Large example, are seven Spanish-speaking mem- nonprofits to create development projects banks are looking at a smaller segment of bers, and seven Lawrence residents. We and then to offer the bank a financing plan. customers, maybe 2 percent. For them, a have more women than other banks—three I really love development. That’s why I’m targeted product may not make sense. A prominent Massachusetts businesswomen positioning Veritas as a development bank small bank with the same product may help originally from Latin America. for Lawrence. I realized that a large regional 40 percent of clients. Veritas will offer spe- bank couldn’t do everything a small bank cialized products: one is a payroll debit card What could banks have done about could. TD is a very well-run bank, but its that lets customers who work two jobs with- irresponsible mortgage brokers? headquarters was in Toronto, its regional draw paychecks from ATMs at any hour; Banks are famous for being reactive. Active headquarters in . I saw a gap in urban another is a more efficient, safer, and less planning from a community development areas like Lawrence, which is dominated expensive way to wire funds overseas. Even- perspective is rare. Instead of living quarter by large banks. Large organizations under- tually, we’ll move people into the financial to quarter, bankers need to think long term. standably have non-Lawrence, non-urban, mainstream. If Veritas had been open, we would have

Communities & Banking 29 gone directly to the neighborhoods and When I hear about long-time citizens College to create a satellite campus, and we counteracted brokers with seminars, ads, getting laid off and demanding good jobs, helped finance it. radio. We won’t be reactive. Our plans are I sympathize on one level. But I can’t help And Veritas is partnering on a new built around three-year intervals. thinking of my parents and my wife’s par- hotel. Experts said no one would build ents, who couldn’t speak English and took hotels in Lawrence, but I met a man who How has immigrating as a child whatever jobs they could find and made sure has built good hotels in challenging com- helped you understand clients? that the kids had Christmas gifts and went munities. Now he’s coming to Lawrence. I know how hard immigrants work. My to college. My father passed away when I Another partnership arose from discus- mother worked in a factory. My father was 14, but he instilled in me the idea that I sions about revitalizing downtown. We had had three jobs simultaneously. Immigrants had to go to college. the idea that a cooking school might even- work long hours, so Veritas will be open tually translate into start-up restaurants. I at times they can get there and will have a What does the future hold called Cambridge School of Culinary Arts drive-through, unlike other banks in down- for Lawrence? out of the blue, and they invited me over. town Lawrence. It used to be a transitional city—people Later they called back and said, “We did came, worked, and moved on. Now with some research, and a large percentage of Some Americans don’t seem the decrease in crime and improvements in our students come from the Merrimack to appreciate how hard the school system, it’s becoming a perma- Valley,” where Lawrence is. Mayor Sullivan immigrants work. nent home. The mills in Lawrence are being is very good at convincing businesses to But, you know, with three jobs, my father developed for workforce housing and for set up shop, and now we have a culinary was as happy as can be. Once immigrants businesses squeezed out of Boston. We have arts campus. get that check, they forget how tired they four highways and an intermodal transpor- Veritas will continue to think creatively. are. They want to work. Interestingly, the tation center—commuter rail, vans, buses, We’ll do straightforward, sound banking, Ecuadorians I grew up with despised social and taxis going to the airports. but we’ll have a development approach with programs. My family had one bad year, And Lawrence is growing through col- a heavy emphasis on partnerships. We don’t and we technically qualified for welfare. I laboration. When I saw that Lawrence had need to reinvent the wheel. heard grownups around the kitchen table the lowest percentage of college graduates saying they would never ever accept a wel- in Massachusetts, I thought that if we had This Communities & Banking article is copyrighted fare check. I was a little kid, and it sounded a college, some graduates would stay and by the Federal Reserve Bank of Boston. The views like free money to me, but for them it was a expressed are not necessarily those of the Bank or contribute to our growth. So when I was at the Federal Reserve System. Copies of articles may matter of pride. TD Banknorth we convinced Cambridge be downloaded without cost at www.bos.frb.org/ commdev/c&b/index.htm.

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