Eduardo Tobon:
Hola I'm, Eduardo Tobon. I am the Latino segment head for BMO Commercial Bank and the proud creator of our BMO index 500, which encompasses the largest Latino owned companies and their leaders. Today I'm introducing our episode with Ernie Johannson Group Head, North American Personal and Business Banking at BMO and Patty Arvielo, co-founder and CEO of New American Funding.
Speaker 2:
Welcome to Markets Plus we're leading experts from across BMO discuss factors shaping the markets, economy, industry sectors, and much more. Visit bmocm.com/marketsplus for more episodes. The views expressed here are those of the participants and not those of BMO capital markets, its affiliates or subsidiaries.
Eduardo Tobon:
Ernie leads a highly engaged team responsible for helping 10 million personal and business banking customers make real financial progress. American Banker Magazine has included Ernie on his list of the most powerful women in banking since 2019. Patty has scaled New American Funding into the largest Latino owned private mortgage company in the nation. She oversees more than 4,600 employees, 54% of whom are women, and 38% who are from diverse backgrounds. This incredible women gather recently to discuss opportunities with the U.S. Latino segment and women led organizations as well as leadership lessons from scaling a company among other topics.
Ernie Johannson:
Thank you for joining us. As I was reading your bio and all your awards and recognition, I just want to thank you for taking time, but most importantly, to recognize you as a phenomenal female Latina leader and just a privilege to have a chance to chat. So thank you for making the time with us. One of our questions we always ask everyone is really about how you built your business, the largest Latina owned mortgage company in the nation, and what's been your experience, the highs and the lows that you've had. But most importantly, we learned so much from understanding the biggest challenge that you had and how you overcame it.
Patty Arvielo:
Well, thank you so much for having me today and for all your kind words. Still kind of a humbling experience. I don't even Google myself, but apparently there's a lot of data. Great question. I think that for me, it hasn't been the traditional path, that I think I talk a lot about that there's this journey or this path that's taught to us in this country that you have to look one way or be educated one way to be able to succeed or build a company as dynamic as we've been able to build and it's untrue. I stumbled into the mortgage business when I was 16 years old, out of a desire to just make the most money I could per hour at a very young age because I figured if I'm going to go to work, I'm going to go to work to make the most money I can.
And I also had a very big desire to just earn money to kind of take care of my family. I'm the oldest grandchild of our family and my nana was the matriarch, and so we didn't really have a grandpa, and so I saw female strength my entire life. When I graduated high school, of course, I had that narrative fed to me that I needed to go to college, and it wasn't really something that was given to me as an opportunity by my family. It wasn't really instilled in me by my father or my mother because they didn't come from backgrounds that were with higher education. So I did walk onto a college campus, but I walked off because I already had a really nice car and debt and I was making pretty good money at 18. So I decided to continue on my journey and I was really fortunate at 19, I took what I was doing to make money and found a passion.
Because, I figured out really early on that what I did in mortgage lending was deliver the American dream. So when I would close home loans and call the borrowers and tell them your loan close, and it was their first home, I thought it was the most dynamic thing ever. These people are so excited to get their first home. Everybody wants to own a piece of our country. So that I felt very early on that I found this passion towards delivering that. My journey is not traditional and it's definitely filled with just a lot of mistakes that I did one time, but I never make them twice. And that was kind of my learning lesson.
Ernie Johannson:
It's a great learning lesson. Don't make the same mistake twice. And I love the history and the background, the context of who you are because it shapes everything you do as a leader. Your background, your past, your experiences. You lead a very large organization and you bring yourself every day into that organization as the leader. And I can imagine the culture in your organization is one that you pay an enormous amount of tension to and you think about it a lot. Love to get your perspective on culture building. How do you do it as a leader and what have you maybe learned along the way that you would pass along from your experiences?
Patty Arvielo:
When corporate America wants to build culture, you have to start at the top. We have to be at the table and we have to have power. I oftentimes get asked to be on public companies because I'm a Latina, but I really just want to be asked to be on a company because of my background, my experience, and my view of the country and the world and how leadership looks, especially with the new generation of employees that are joining different companies. So we have a very natural building process to our culture that we have formalized because people talk to us about it and it's called NAF 360.
So we actually have a name and a narrative around our culture and oftentimes I'll see emails, this was so NAF 360 cheering on an employee, and sometimes I've seen emails that like, this person treated me this way. This was not so NAF 360. So we're very clear at the top what that means. And everybody knows that it's important and all it is to deliver dignity and respect 360 degrees, meaning that to our consumers, to your coworkers, to our borrowers, to everybody we come in contact with as a company, we want to treat them with dignity and respect.
Ernie Johannson:
What you described to me was something that is an authentic, transparent leadership style. I love the language of egoless in your culture and the fact that you framed NAF 360 is common language that anyone can use back and forth in the organization. It's not judgemental, it just calls something out, celebrates something, or says maybe something's not as appropriate from a culture perspective. So I think that creates a lot of trust within the organization, and I can see how your organization is so aligned because of that and that everyone is kind of rowing in the same direction and it takes a lot of people rowing in the same direction to do what you've done.
And I think about the work that your organization does around moving the traditional barriers to the financial services sector. We believe in that at BMO as well around the idea that everyone deserves and should have access to financial services. And that's a fundamental right, and our perspectives on know you share that, but your company is doing something very special, very different when you assist your customers and helping them build wealth. Can you just give us a little bit of a flavor of what that is and how that looks like every day?
Patty Arvielo:
The home ownership rate amongst minorities has lagged significantly behind white borrowers. In 1994, I too was a loan originator that thought that loans just fell out of the sky. That refinance has always happened. I still was fairly young. I didn't really get the whole wave of interest rates going up and then no business they were going down and then so much business. Well, this particular time they were all of a sudden interest rates shifted up and really honestly, the day interest rates shift up, mortgage business just shuts off. At that time, I was in Fountain Valley, California and we bordered Santa Ana, California, which is one of the largest Hispanic cities in the country actually. And so as I saw the business refinances go away and I saw purchases staying relatively consistent, I saw this one particular city and the realtors being really busy and they were a Latino.
So I thought, oh, I'm going to go to Santa Ana and originate loans. It was just very natural for me. I started to go to Latino-owned broker offices and telling them, I'm Latina. I speak Spanish, I work at Countrywide. We have great rates. And I started to significant following in this little city that because I was very, very fast in what I could do in delivering the home loans, because oftentimes minorities who come to our country are not taught about how to apply for mortgages. So right back then I had this teacher mindset around the stability of home ownership and home ownership for all, meaning that when I originated loans to a Latino borrower, I saw the desire to own 10 times more from that culture and that community, just the excitement over the whole family owning a home. So I have formalized my process of delivering loans to this community since 1994.
At NAF it's called Latino Focus. It has a name, it has a huge following. We just threw a Latino Focus event in Orlando and had over a thousand real estate agents show up because we teach companies how to hire a mere communities they're trying to serve. So it's not so much that you have to be fluent in Spanish, but you have to understand our cultural nuances on how we save, how we spend, and in our why, right? Our immigrant perspective is super important, and we teach that at New American Funding so that we're able to deliver home loans the way people want to be served.
Ernie Johannson:
Great framing. And what's interesting about what you're doing, what's fantastic is it's transformative. So it isn't about one interaction. You're actually transforming generations to come and setting them up on a foundation around how to be financially savvy and making it bigger than just a mortgage. It's about life changing and family changing. So it's incredible, and I think the work is fabulous.
And one that really resonates with me because this is about building wealth for the next generation, the next generation, and that carrying on and changing and transforming communities and families' lives is exciting. Really pleased to hear that from you and the experience you've brought to it and your company. Congratulations again, has been ranked on our BMO Index 500 with Latino leaders as one of the largest Latino owned US companies, and you receive some great, well-deserved recognition at our recent reception at BMO Stadium in LA and in our events, in our podcasts, we've observed that how many Latinas like you have been successful in their business, and why do you think that is? I can say one answer. I can say there's passion in everything that you say. This is about your head and your heart being aligned with you. Give me a little bit more on what do you recommend for female leaders like yourself to take on these entrepreneurial opportunities, which could be scary, but you've carved a pathway for your first success.
Patty Arvielo:
So Latino families, were born entrepreneurs. We do the jobs most people don't want to do. We're your housekeepers, we're your gardeners, we're your maids. Well, what's happening is those housekeepers, those gardeners and their maids are giving to children like me, and they've been born in this country, they're educated in this country. We don't see so many role models that we resonate to in this country yet because the media doesn't portray our stories very well. But I always say, I am the product of your housekeeper. A housekeeper does clean your house. Trust me, she's working so her daughter can go to a four-year university. Her daughter can have all these types of opportunities. So naturally, that's just the evolution that's going on, and we're just significantly large part of this country. So Latinas are graduating colleges faster than any other demographic. We come from an entrepreneurial spirited background, so they're opening companies.
I've invested in 12 and hopefully one has seven offers on her table. She will be able to announce that she'll have the largest CPG exit in the country as a Latina. So for me to surround myself in our community where I get my education and my background, I see the drive. There is a lack of funding towards these companies because there's a lack of understanding to the consumer who is purchasing the products that they're delivering. So I'm working on that. I think we need to educate private equity, VC, firms on the importance of delivering product to our community because we do look for different things in the stores.
So I just think that the Latino demographic in this country is an underserved opportunity, meaning that at New American Funding, we see it as a business opportunity, not just as a right thing to do. It is a huge business opportunity for your organization, for my organization, and I think that as the companies are starting to evolve and see us as a business opportunity, we'll start to see the funding come towards these Latinas to deliver their product to the consumer reach that's very much desiring to purchase what they're delivering.
Ernie Johannson:
I'm going to give you one last question because I think it just speaks to who you are as a leader and as a person. What would you say to your younger self if you had a chance to go back, encourage yourself or something that you would love to have shared to your younger self now that you've experienced what you've experienced?
Patty Arvielo:
I think about my younger self and just always thought I was lucky. And so I think the imposter syndrome that has been talked about is real. I lived it. I didn't know the name of it, but I lived it. I was just thought, oh my God, how come all these people are coming to work for us? I'm so lucky and not good. So I really think that sitting with yourself and understanding your strengths and working on your confidence at a very early age is really important.
Honestly, it was my husband that got me to work on my confidence when he came to me and said, "we need to open our own business if we want to create generational wealth instead of working for others", which we were early on in our career, the both of us. And so if it wasn't for him giving me my first bit of like, wow, somebody like him thinks I'm smart, I don't know that I would've climbed the ladder as high as I have, but I don't think you need to look for somebody like my Rick to do that. I think you really need to look within yourself to be your biggest cheerleader, to be your biggest advocate, to work on your self-confidence every day. Things are not just happening because you're lucky they're happening because you're good.
Ernie Johannson:
You hit the nail on the head from my perspective, how we should encourage younger women and particularly Latina women to be who they are and do what they're built to do. And all of us as a community, encourage them on and cheer from the side, fund them, as you said, buy their products, but be part of the community that really lets them be who they are to be successful. So on behalf of BMO, I just want to thank you for the time you've given us, but also for being such a great role model for a community and transforming a community, but also building a future of financial prosperity. It's just great to watch you in action and hear you, and it's just been a joy. Really, really appreciate it Patty.
Patty Arvielo:
Thank you so much for having me.
Eduardo Tobon:
If you haven't already, be sure to listen to the previous podcasts in our series where we take a deeper dive into how the BMO Index 500 was born, and showcase the remarkable achievements of many Latinos and Latinas. [foreign language 00:16:15]. Enjoy.
Speaker 2:
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Speaker 5:
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