Key Federal Savings Bank, the secured card specialist, is joining a handful of card issuers in marketing to the Hispanic population.

But unlike its competitors, Key Federal has established an operations center in Puerto Rico to handle customer service, telemarketing, and collections.

Robert M. Bouza, president of Key Federal's card operations and of Key Service Center of Puerto Rico, intends the center to be the focal point of the bank's marketing efforts to the Hispanic community.

In November, the Havre de Grace, Md.-based thrift launched its first product targeting Hispanics, a secured affinity card benefiting SER-Jobs for Progress Inc., a nonprofit organization providing job training and day care to Hispanics.

Even before Key Federal introduced the SER MasterCard, it had been issuing a private-label card to the Puerto Rico National Guard that can be used at the 12 military bases on the island. So far, Key Federal is managing about 1,600 accounts for National Guard members.

Mr. Bouza maintains that the profit earned from serving the military accounts offsets the cost of using the operations center for Key Federal's marketing efforts in the United States.

Like a growing minority of credit card issuers, Key Federal wants to tap the Hispanic market, which by some estimates is 10% of the U.S. population and is expected to grow dramatically.

But marketing to this group is not easy.

For one thing, said Mr. Bouza, Hispanics are more resistant to offers of credit. Moreover, finding bilingual employees in the United States to handle account queries is difficult. For this reason, establishing a center in Puerto Rico was particularly attractive. Mr. Bouza said nearly 90% of the island's population speaks both English and Spanish.

"I am finding that a lot of financial institutions are not thrilled with their marketing efforts to this group," said Mr. Bouza.

Among the pioneers in marketing credit cards to Hispanics are First Consumers National Bank of Beaverton, Ore.; Citibank, a unit of New York's Citicorp; and People's Bank of Bridgeport, Conn.

Patti McCoy, director of marketing at First Consumers, praised Key Federal's move to Puerto Rico, recalling the difficulties her bank experienced in 1990 when it launched the Adelante card for Spanish-speaking people.

First Consumers' initial marketing efforts were disappointing, "worse than the worst-case scenario" the bank had prepared for, said Ms. McCoy.

People's Bank also experienced growing pains launching the Telemundo card, which is affiliated with the Spanish language television station of the same name.

People's lists the card among its innovative achievements, yet in 1993 it stopped marketing the product. Both Telemundo and People's declined to explain why the card is not actively marketed, but industry sources said Telemundo pulled out, in part, because its reputation was harmed when a large percentage of the people who applied for the card were rejected by People's.

Another theory is that Telemundo wanted many credit card issuers to advertise on its station and, thus, didn't want to be tied to one card.

People's Bank still offers its standard credit card product to Spanish- speaking people.

"We created a delivery system to serve the Hispanic community with the Telemundo card," said Mark K. Vitelli, first vice president of consumer credit. "Without the card, we probably wouldn't have put all of those things together."

Key Federal also plans to offer its standard credit card product in Spanish through the operation in Puerto Rico.

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