C&B talks to Pedro Arce, CEO of Veritas Bank. Veritas, a new bank, will work with community groups on development projects and serve the 70 percent Latino population of Lawrence, Massachusetts, in ways that might not be practical for large regional or national banks.Community development - Massachusetts ; Banks and banking - Massachusetts ; Hispanic Americans - Massachusetts ; Immigrants - Massachusetts

Pedro Arce

English

Research Papers in Economics

28   Summer 2008
first person
CEO of  Veritas Bank
Pedro Arce
We Just
Knock
on
Doors
Pedro Arce is chief executive officer of Veritas, a new bank in Lawrence, 
Massachusetts.  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 Boston 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 CongressCommunities & Banking    29
You have experience in both  
banking and community work?
Yes.  I  worked  for  Bank  of  Boston  from 
1990 to 2000, at Nuestra Comunidad com-
munity development corporation for a year 
and a half. Then I went to TD Banknorth 
for 4-1/2 years. At Nuestra Comunidad I 
supervised projects such as the kitchen in-
cubator,  some  technical-assistance  and  fi-
nancial-literacy programs, and our pushcart 
program. I packaged small business loans 
and submitted them to banks or nonprofit 
agencies for funding. I managed a neighbor-
hood business-development center so orga-
nizations doing similar work could collab-
orate—Jewish  Vocational  Services,  Urban 
Edge, This Neighborhood Means Business, 
Acción, and so on. I’d noticed competitive-
ness  among  some  Boston-area  nonprofits 
and  wanted  to  enable  more  cooperation. 
For the kitchen incubator, we rented space 
from the Jamaica Plain Neighborhood De-
velopment Corporation, which owned the 
ideal location, Sam Adams Brewery. 
Did nonprofit experience enrich 
your work as a banker?
I think so. I always wondered how CDCs 
could accomplish all they did with so few 
resources. I value my time at Nuestra Co-
munidad, but I was ready to return to the 
private sector and a bigger market. At TD 
Banknorth I was community development 
manager for the whole state, working with 
nonprofits to create development projects 
and then to offer the bank a financing plan. 
I really love development. That’s why I’m 
positioning Veritas as a development bank 
for Lawrence. I realized that a large regional 
bank couldn’t do everything a small bank 
could. TD is a very well-run bank, but its 
headquarters  was  in Toronto,  its  regional 
headquarters in Maine. I saw a gap in urban 
areas  like  Lawrence,  which  is  dominated 
by large banks. Large organizations under-
standably have non-Lawrence, non-urban, 
priorities. For Veritas, Lawrence and urban 
gateway cities are the priority. 
How is Veritas Bank different?
Veritas is a for-profit, state-chartered savings 
bank with a double bottom line: profitability 
and social impact. It’s Latino because that’s 
what 70 percent of Lawrence is today. Most 
of our board members are successful Latino 
professionals.  But  immigration  patterns 
change, and we aim to serve all immigrants. 
We’re also a development bank. Individu-
als, nonprofits, or municipalities can bring 
us ideas on community improvements. We 
want to work on both the financing and the 
early planning. 
Are you interested in other  
Latino locales?
We’re looking at East Boston and Chelsea, 
but we won’t just focus on Spanish-speaking 
communities. Framingham is high on our 
list, even though Framingham’s immigrants 
are  predominately  Portuguese-speaking. 
We’re  also  exploring  Asian  communities. 
When we see distressed areas and no big 
banks, we see opportunity.
Isn’t it difficult to attract  
unbanked immigrants? 
Not  really.  Sometimes  banks  cite  regula-
tions as a barrier, but that’s an excuse. If you 
want to do it, you can. You need to bring in 
products that match the community. Large 
banks are looking at a smaller segment of 
customers, maybe 2 percent. For them, a 
targeted  product  may  not  make  sense.  A 
small bank with the same product may help 
40 percent of clients. Veritas will offer spe-
cialized products: one is a payroll debit card 
that lets customers who work two jobs with-
draw paychecks from ATMs at any hour; 
another is a more efficient, safer, and less 
expensive way to wire funds overseas. Even-
tually, we’ll move people into the financial 
mainstream. 
How do you attract the unbanked?
Easy: knock on doors. When I was at Bank 
of  Boston  in  1998,  we  were  concerned 
about being last in market share in Law-
rence.  Although  we  did  great  projects  in 
Boston, we had no promotion budget for 
Lawrence.  One  door  I  knocked  on  was 
Lawrence  Community  Works,  which  was 
not the premier CDC it is today. I arrived 
at 2 p.m. on a weekday, and the doors were 
closed. I thought, “The only CDC in town? 
It should be abuzz with activity.” 
I  became  a  board  member,  and  we 
brought  in  new  leadership.  Since  then 
Lawrence  Community Works  has  had  an 
impact on hundreds of lives through hous-
ing projects, youth development, financial 
literacy training, and more. I liked work-
ing with LCW, and I hope that people who 
know me from there may one day come to 
Veritas. 
When you knocked on doors, did 
you speak Spanish?
Absolutely. We went on the radio, joined 
nonprofits, got involved. We put a sign in 
front of the bank, “Hablamos Su Idioma”—
“We speak your language.” 
But  reaching  the  community  is  a 
two-step  process.  It’s  not  enough  to  hire 
Spanish-speaking  tellers.  You  must  give 
some of those hires decision-making author-
ity. Among the 11 people on our board, for 
example, are seven Spanish-speaking mem-
bers,  and  seven  Lawrence  residents.  We 
have more women than other banks—three 
prominent  Massachusetts  businesswomen 
originally from Latin America.
What could banks have done about 
irresponsible mortgage brokers?
Banks are famous for being reactive. Active 
planning from a community development 
perspective is rare. Instead of living quarter 
to quarter, bankers need to think long term. 
If Veritas had been open, we would have 30   Summer 2008
gone  directly  to  the  neighborhoods  and 
counteracted  brokers  with  seminars,  ads, 
radio. We won’t be reactive. Our plans are 
built around three-year intervals. 
How has immigrating as a child 
helped you understand clients?
I  know  how  hard  immigrants  work.  My 
mother  worked  in  a  factory.  My  father 
had three jobs simultaneously. Immigrants 
work long hours, so Veritas will be open 
at times they can get there and will have a   
drive-through, unlike other banks in down-
town Lawrence. 
  
Some Americans don’t seem  
to appreciate how hard  
immigrants work. 
But, you know, with three jobs, my father 
was as happy as can be. Once immigrants 
get that check, they forget how tired they 
are. They want to work. Interestingly, the 
Ecuadorians I grew up with despised social 
programs.  My  family  had  one  bad  year, 
and we technically qualified for welfare. I 
heard grownups around the kitchen table 
saying they would never ever accept a wel-
fare check. I was a little kid, and it sounded 
like free money to me, but for them it was a 
matter of pride. 
When I hear about long-time citizens 
getting laid off and demanding good jobs, 
I sympathize on one level. But I can’t help 
thinking of my parents and my wife’s par-
ents, who couldn’t speak English and took 
whatever jobs they could find and made sure 
that the kids had Christmas gifts and went 
to college. My father passed away when I 
was 14, but he instilled in me the idea that I 
had to go to college.
What does the future hold  
for Lawrence?
It  used  to  be  a  transitional  city—people 
came, worked, and moved on. Now with 
the decrease in crime and improvements in 
the school system, it’s becoming a perma-
nent home. The mills in Lawrence are being 
developed  for  workforce  housing  and  for 
businesses squeezed out of Boston. We have 
four highways and an intermodal transpor-
tation center—commuter rail, vans, buses, 
and taxis going to the airports. 
And Lawrence is growing through col-
laboration. When I saw that Lawrence had 
the lowest percentage of college graduates 
in Massachusetts, I thought that if we had 
a college, some graduates would stay and 
contribute to our growth. So when I was at 
TD  Banknorth  we  convinced  Cambridge 
College to create a satellite campus, and we 
helped finance it. 
And  Veritas  is  partnering  on  a  new 
hotel.  Experts  said  no  one  would  build 
hotels in Lawrence, but I met a man who 
has built good hotels in challenging com-
munities. Now he’s coming to Lawrence. 
Another partnership arose from discus-
sions about revitalizing downtown. We had 
the idea that a cooking school might even-
tually translate into start-up restaurants. I 
called Cambridge School of Culinary Arts 
out of the blue, and they invited me over. 
Later they called back and said, “We did 
some  research,  and  a  large  percentage  of 
our  students  come  from  the  Merrimack 
Valley,” where Lawrence is. Mayor Sullivan 
is  very  good  at  convincing  businesses  to   
set up shop, and now we have a culinary   
arts campus. 
Veritas will continue to think creatively. 
We’ll  do  straightforward,  sound  banking, 
but we’ll have a development approach with 
a heavy emphasis on partnerships. We don’t 
need to reinvent the wheel. 
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We just knock on doors

http://www.bostonfed.org/commdev/c&b/2008/summer/First_Person_Arce_Veritas_Bank.pdf

We just knock on doors

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