Bridging a Cultural Custom with the Credit Union Experience

Posted by on April 15, 2014

For many immigrants, particularly Latinos, using tandas is a way of life.

Also known as cundinas, sans or quinelas, tandas are informal borrowing and lending circles that provide an alternative to a traditional savings account and a loan from a financial institution. Quite simply, tandas allow for a short-term, no-interest loan and savings account among friends and family.

Growing up in California and Iowa, my parents participated in tandas with their friends, co-workers and neighbors. Before they established accounts at financial institutions (and even a few times after), my parents turned to tandas to save and borrow money outside of the financial mainstream.

Tandas typically work in the same fashion — a group of people already acquainted with one another collect money to help each other financially. A leader, whom is acquainted with tandas, gets the group together and is responsible for collecting, holding and distributing the money. The leader usually sets the rules aimed at benefiting the entire group, including the amount of money collected, when the money will be collected and the number of people in the group. Once these parameters are established, the leader randomly chooses the order of whom is going to receive the money. Most often, tandas distribute money through a raffle or make the decision based on the individual(s) believed to need the money most.

Here’s an example of how a traditional tanda could work: The tanda is formed with 10 friends and family. Each member contributes $100 every two weeks to the group leader. At the end of the month, one participant gets the “pot” of $2,000. This process continues until each member has received the pot.

The tanda played a very important role in my family life. Each time that my parents borrowed from the tanda, the money was earmarked for specific expenses, such as furniture for our first house, immigration expenses as we were going through the process of adjusting our status in the U.S. or trips to Mexico to visit family.

I remember taking turns going with either my mother or my father to the tanda group leader’s house when we moved to Iowa. She was a neighbor — someone everyone in the Latino community knew and trusted. The tanda leader was also an entrepreneur. She sold jewelry and home interior products to the community, which my parents also bought from her. My parents would give her their $100 payment in cash, usually after my father got his paycheck cashed from work. The tanda leader would then store the cash in a little cash box in her office desk and would note my parent’s payment in a notebook.

I also witnessed my parents pulling a number from a box, letting them know when it would be their turn to receive the lump sum from the tanda.

When I was a teenager, my parents began to entrust me with delivering the $100 payments. As the oldest child in my family, this was a big responsibility but seemed very simple to do. Throughout my childhood, I did not realize that there was an alternative to saving and borrowing money at a traditional financial institution because I was used to seeing my parents cash their checks, borrow and save completely outside of the financial mainstream.

Tandas were convenient, they involved people that we knew and trusted, and they helped my family out financially when we needed it.

Although very small in nature, tandas are making big headlines. NPR’s Changing Lives of Women series and Code Switch have each covered the topic in recent months. The article, Lending Circles Help Latinas Pay Bills and Invest, is one example. Modern tandas are aiming to bridge a cultural custom with the credit union experience.

To leverage the benefits and emotional, cultural and community connections of the tanda on a larger scale, Coopera worked with Travis Credit Union (TCU) based in Vacaville, Calif. through a grant from the National Credit Union Foundation, to create the modern version of a tandas — the New Era Tanda Program. This program was specifically designed to bring the concept of the tanda to the credit union, where people helping people is the organization’s primary mission.

In addition to supporting Latino families save and borrow, the program helps individuals open accounts, build a credit history and receive financial education.

Participants in the program contribute on a monthly basis to a shared savings account and also receive a group share-secured loan to help save for a down-payment on a vehicle. After satisfactory completion of the program, each participant is eligible for a TCU credit-building credit card and/or auto loan. The program uses a grassroots and culturally relevant approach tailored to the local Latino community.

TCU’s program is just one example of how tandas can work in the mainstream financial system. Through modern tandas, credit unions of any size and in any location can realize tremendous opportunity to engage with the Latino community, as well as to bridge cultural traditions and customs with good financial alternatives.

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Grant Fund to Help Credit Unions Invest in Hispanic Membership Growth

Posted by on February 25, 2014

Visionary and Coopera Founder Warren Morrow

Last week, we announced in partnership with the Credit Union National Association (CUNA) the development of a grant fund in honor of Warren Morrow, credit union advocate and Coopera founder. The Warren Morrow Hispanic Growth Fund, established through the National Credit Union Foundation will help credit unions with less than $500 million in assets start or enhance a Hispanic growth program.

Warren was a visionary in the credit union industry who saw immense potential for growth for those cooperatives that focused strategically on serving the largest, fastest-growing and youngest community in the United States. To carry on his legacy, this fund supports what Warren believed deeply – that credit unions were the avenue to providing dignified financial services to Hispanics.

“I can’t think of a better way to celebrate Warren than by carrying forward his vision,” CUNA COO Jill Tomalin commented in our press release. “CUNA is pleased to be working with Coopera to launch the new fund and we look forward to its impact.”

To kick off contributions to the fund, Coopera will donate $1,000 as a part of its participation in the “Make a Difference” project hosted from its booth (#329) at the CUNA Governmental Affairs Conference (GAC), February 23-27 in Washington, D.C.

Donations can be made anytime by visiting http://tinyurl.com/morrowdonation.

A celebration will take place at the 2014 CUNA Community Credit Union & Growth Conference, scheduled for November 3-6 in Las Vegas. More details will be announced later.

Warren, who passed away in early 2012 at the age of 34, founded Coopera in 2006 in partnership with the Iowa Credit Union League to help credit unions across the country reach and serve Hispanics as an opportunity for growth. In 2009, Coopera also partnered with the Credit Union National Association (CUNA) to form an exclusive alliance partnership to further Hispanic outreach throughout the credit union industry.

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The Need for Back Translations in 2014 and Beyond

Posted by on January 21, 2014

The Hispanic market in the U.S. continues to grow and change at a rapid pace, which will present significant opportunities (and challenges) in 2014. One of the most important ways to prepare right now to better serve Hispanic members in the coming year is to conduct an audit of your bilingual marketing materials and signage.

One of the most common misconceptions about the Hispanic culture is that Hispanics speak different forms of Spanish. Although there are different colloquialisms or words, phrases or statements that are unique to a certain culture or region, there are not completely different forms of the language — the basic language structure of Spanish is shared. Because there are cultural nuances in the Spanish language, it is important for your credit union to make sure that your translations are accurately conveying your messages. The best way to accomplish this is by performing what are called “back translations.”

What is a back translation? It is a second translation of text back to the original language (in most cases, English) to ensure developers understand the final meaning of their translation.

When the source language is English, there is often discrepancy in the meaning between the original source and the back translation. Spanish, for example, has a notably different vocabulary, and many words that are used in English simply don’t exist. Back translations should be performed to ensure that the language is a correct translation of the original, in which, the meaning was not changed, but also the readability of the text has not been affected through the translation process. The process should include conducting at least two back translations and working with the original translation to accommodate the findings of the back translation.

Here’s an example: When you translate the English phrase “all the rage” to Spanish, you do not want to convey the literal meaning but rather the cultural meaning of that phrase. The Spanish translation of this phrase could be “lo ultimo.” A back translation of “lo ultimo” would tell you that you are translating “all the rage” to a similar phrase that will be understood in Spanish that means “the latest.”

The important thing to remember when doing back translations is that the person doing the back translation should be familiar with the original version in English to avoid inadvertently changing meanings of the content. For credit unions, here are some examples of common phrases you’d likely have translated and the corresponding back translations:

English source: Limit our sharing
Spanish translation:  
Limite la confidencialidad  que compartimos
Correct back translation: Limit the confidentiality we share

English source: Build Credit
Spanish translation: 
Establecer un Historial de Crédito
Correct back translation: Establish a Credit History

To prove how easy it can be to incorrectly back translate certain phrases, here are some examples of back translations gone wrong:

English source: Batch (transactions)
Spanish translation: Partida
Incorrect back translation: Departure

English source: Arrangement between two parties
Spanish translation: Arreglo entre dos partes
Incorrect back translation: To fix two parts

Although they may seem to be a time-consuming and expensive task, back translations are a critically important part of your credit union’s validation and cultural adaptation to specific Hispanic markets. Doing back translations can help to avoid errors, as well as better understand what the credit union has had trans-created. For instance, many credit union compliance or legal departments request back translations to double check that approved messages are what is truly being distributed to members.

By becoming more familiar with the language nuances of your credit union’s local Hispanic population, you will be better positioned to provide for these members’ needs. For credit unions willing to invest the time and resources, the benefits of a bilingual marketing audit will greatly outweigh the perceived costs.

To best understand the make-up of the local population Coopera can help with a comprehensive market analysis. Rest assured, however, the basics of the Spanish language will be understood by your Hispanic members.

 

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A Look at New Products for Underserved Hispanics

Posted by on December 31, 2013

More than one in four households (28.3 percent) in the U.S. today is underserved, conducting all or some of their financial transactions outside of the mainstream banking system. Hispanics represent a disproportionate number of this group — in fact, there are nearly 7 million Hispanic households in the U.S. that are underserved. This means that about one out of every two U.S. Hispanics falls into this classification.*

Because of the U.S. Hispanic market’s sheer size, youth and rate of growth, it represents a large market opportunity for credit unions. Creating products and services to specifically meet the needs of underserved Hispanic consumers can give your credit union a significant competitive advantage in 2014.

When it comes to attracting Hispanic consumers — underserved or not — one-size-fits-all financial products and services don’t work. As your member base continues to diversify, it is unrealistic for you to expect the Hispanic community to conform to your products and services — it’s got to be the other way around. Therefore, if your credit union is looking to attract more Hispanic members in 2014, you need to plan now to provide fair, dignified and tailored financial services.

Fortunately, there are many products offered by credit unions across the country that have been created with the Hispanic consumer in mind and are a good fit for the Hispanic market. The products include culturally relevant savings programs, prepaid reloadable card; auto, micro and lifestyle loans (for quinceañeras, weddings, immigration, citizenship, travel, etc.) and financial education. If you don’t already have these products in your portfolio, now is the time to add them.

And, even more products are on the horizon. the Filene Research Institute, is currently testing four products to benefit underserved consumers, including Hispanics, in its new financial services incubator.

Here’s a quick synopsis of these products:

-Non-prime Auto Lending from the National Credit Union Foundation. This program helps lenders fairly price and manage non-prime auto loans, incorporating the Lower Interest For Timeliness (LIFT) idea introduced by Filene’s i3 innovation team. LIFT is a loan feature that reduces interest rates when members make on-time payments.

-Borrow and Save from the National Federation of Community Development Credit Unions. This product increases consumers’ economic security by providing an affordable small-dollar loan with a payment term that makes sense for them. A built-in savings component also helps consumers self-fund their emergencies instead of borrowing money to handle them.

-Pay Yourself Back from Innovations in Poverty Action. As an add-on to any loan type, this product seamlessly converts borrowers into savers. Leveraging the habits formed by regularly making loan payments, it encourages consumers to keep making regular payments (or a portion of them) to themselves after the loan is paid off.

-Employer Sponsored Income, Advance Loan from North Country Federal Credit Union. This small-dollar loan program is offered to employees of select employer groups (SEGs)  partnered with credit unions. Loan payments are auto-deducted from direct-deposited paychecks. Once the loan is paid, employees may continue making payments into savings accounts.

At Coopera, we see a lot of potential in these products for Hispanic consumers. We have found that many Hispanic consumers aren’t aware of what financial services are accessible to them, as well as struggle with basic financial education around money management and building/maintaining credit. These new products from Filene could help address these gaps and guide underserved Hispanics on a path to achieve their financial goals. We will keep you posted on how the testing phase of these products goes, as well as the potential for implementing them into your current product mix.

*For more information about the demographics of Hispanic consumers, download the Coopera white paper “The Multifaceted Hispanic Market” at http://tinyurl.com/c8jwf45.

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Credit Union Takes a Step Back to Better Align Hispanic Outreach Efforts

Posted by on December 10, 2013

With 40 percent of its local market claiming Hispanic heritage, the growth path of People’s Trust Federal Credit Union, headquartered in Houston, Texas, was pretty clear: It would be critical to make a strategic investment in expanding the credit union’s Hispanic outreach efforts.

In 2008, People’s Trust began advertising on Spanish television network Telemundo. After a couple of years, however, that effort was put on hold. The People’s Trust leadership team challenged the staff to better understand how the credit union could serve its current and future Hispanic members before advertising. “Our Sr. Management asked us some really tough questions to get us thinking more strategically about our outreach efforts, including how we were internally supporting these members,” said Patsy Jalomo, People’s Trust marketing manager. “We realized that we were not prepared to tackle this alone, and that we needed help from people who have expertise in the Hispanic market.”

Through its relationship with the Cornerstone Credit Union League, People’s Trust was referred to Coopera, and a partnership between the two companies was formed. In February 2013, Coopera conducted a Hispanic Opportunity Navigator (HON) of the local Houston market for People’s Trust, and according to Jalomo, the results were a real eye-opener for the credit union.

“The HON confirmed what our Sr. Management team suspected, specifically that we were not as prepared to serve the Hispanic market as we needed to be,” said Jalomo. “We had the bilingual staff to support our initiatives, but we were missing other basics, like bilingual marketing collateral and documents. We also realized we need to take a closer look at our product  portfolio to determine if we had the right mix to meet the financial needs of our Hispanic consumers.

“The HON research highlighted where our opportunities were and where we needed to focus our attention,” said Jalomo.

With more to accomplish before the credit union could expect to successfully reach the Hispanic market, People’s Trust made the decision to slow the pace of implementation and follow the direction recommended by the HON. “The HON really made our discovery process much simpler,” said Jalomo. “Coopera did an excellent job of really looking into the data, understanding it and giving us a solid recommendation of how to move forward.”

Following Coopera’s guidance, People’s Trust used the results of the HON to quickly classify its primary and secondary markets in the local Hispanic community. The credit union also identified its goals for the Hispanic outreach initiative, including membership and loan volume growth, as well as increasing the credit union’s products-per-member ratio — extensions of the credit union’s overall strategic growth goals.

From there, the credit union put together an internal task force, composed of staff from each of the credit union’s departments, to work closely with its outreach implementation team to identify tasks, set timelines, assign roles and responsibilities, as well as host strategic planning sessions and manage expectations. “The big question from our staff and our leadership teams has been ‘How soon can we get things in process and completed,’” said Jalomo. “With our task force and implementation teams now working so closely together, we anticipate needing 4 to 6 months to get everything in place and formally launching our efforts in June (2014).”

Although slowing down the Hispanic outreach process may, at first, have seemed counter-intuitive to the credit union’s growth goals, Jalomo confirmed it’s been the right decision. “Hispanic outreach is definitely a priority for People’s Trust,” said Jalomo. “Yet, we don’t want to make it too urgent that we miss the strategic intent. There is a lot to do, and we want to do it right.

“Targeting Hispanics is not a quick fix to our membership growth goals,” finished Jalomo. “It’s a long process that requires a lot of patience and investment in time and effort, and we’re committed to its success.”

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Hispanic Outreach – It’s a Marathon, Not a Sprint

Posted by on October 29, 2013

Associated Credit Union, headquartered in Norcross, Ga. (20 miles northeast of Atlanta), is one of the state’s oldest financial institutions. Chartered in 1930 to provide low-cost financial services to its members, Associated Credit Union’s mission has evolved and now includes better serving underserved populations, including the Hispanic community. To do this, Associated Credit Union laid out a multi-year, comprehensive strategic initiative and is in the process of implementing it.

“Several years ago, Associated Credit Union’s executive management team looked at the demographics of the Atlanta metro market from the 2010 Census numbers for opportunities to grow our membership base,” said Annia Reyes, training manager at Associated Credit Union. “The data drove our credit union to the strategic decision to focus on the emerging Hispanic population.”

What Associated Credit Union discovered through its research was that the overall Hispanic population in the metro Atlanta area at the time of the Census was estimated at 530,000. From a county perspective, Gwinnett County, which houses six out of Associated Credit Union’s 28 branches, contained the largest population of Hispanics at an estimated 190,000 and was noted as one of the fastest growing counties for Hispanics in the state. In fact, it is estimated that by 2020, 40 percent of the population in Gwinnett County will be Hispanic.

Equipped with this information, Associated Credit Union turned to Coopera for guidance. The credit union utilized the company’s Hispanic Opportunity Navigator (HON) to better understand what was needed to serve the local Hispanic community.

Thru further research, Associated Credit Union discovered that the median age of the Atlanta metro Hispanic market was quite young, between ages 25 and 26, with annual personal earnings ranging from $17,000-$23,000. And, this trend was expected to continue for years to come, as 11 percent of K-12 students in the Atlanta area were Hispanic.

“With Coopera’s help, we were able to put together a rough sketch of our project plan,” said Huff, project management manager at Associated Credit Union. “We then customized the plan to best meet our objectives and to best serve our new members. We knew we needed to find out what Hispanics in the Atlanta market really needed and wanted out of a financial institution.”

Led by a 15-person implementation team, comprised of both management and frontline staff, Associated Credit Union began to lay the foundation and framework for this initiative. The process included gaining a better understanding of staffing needs, an evaluation of products and services, as well as the development of promotions and new marketing materials. It also included internal education and communication. “With this strategic initiative, we were dramatically changing the culture of the organization to become more diverse,” said Reyes. “We are not only committed to our members but to also our staff.  It’s crucial that our employees are well informed and receive consistent, on-going training.”

The implementation team quickly took charge, initiating periodic staff training meetings on Wednesday mornings before the credit union opened for business, as well as, putting together staff events around local celebrations like Cinco de Mayo. Reyes, Huff and members of the implementation team also held monthly meetings with Associated Credit Union’s executive management team, as well as provided regular updates to the management team during the bi-weekly managers’ meeting. “Building a solid Hispanic outreach initiative is a marathon, not a sprint,” said Reyes. “We had full buy-in from the credit union from the beginning, and it was our job to keep things fresh and exciting during the process to make sure everyone stayed motivated through implementation. Keeping the lines of communication open at all levels of the credit union has been critical.”

Initially, the plan was to roll out the project in four branches, but as the implementation team continued to work on the initiative, they decided instead to “soft” launch in one branch first. “We tweaked our rollout strategy because of the reality of staffing needs and the learning curve, both internally and within the community,” said Huff. “We did a market analysis of Associated Credit Union’s entire operations area, which helped us determine that we needed to focus our initial efforts in our Norcross branch location. We then worked to hire bilingual staff in that branch, as well as in all of our customer-facing departments (i.e. the call center, loan processing center and so on).”

At this point, Associated Credit Union hired its first branch manager from outside the organization in 30 years. The candidate was bilingual and had industry experience that would help lead the charge in the Norcross branch.

Initial launch efforts have focused on word-of-mouth outreach, as well as advertising in a local Spanish newspaper, Mundo Hispánico. Also, Associated Credit Union’s marketing department worked to create bilingual versions of the credit union’s most-used collateral, including membership applications, deposit slips and product and service handouts.

The credit union also worked to make sure its products and services were able to meet the needs of all its members, including Hispanics. The implementation focused on making sure Associated Credit Union’s rate-reward loan program and first-time car buyer programs were available during the soft launch, as well as working with Associated Credit Union’s vendors, like its reloadable prepaid debit card supplier, to make sure these vendors’ customer-facing departments offered bilingual support. The credit union is also investigating adding remittance products in the near future to make sure the credit union is meeting the money transfer needs of the Hispanic marketplace.

Other future initiatives include adding a Spanish page to the credit union’s website, as well as broader community outreach efforts, such as financial literacy programs and local business partnerships.

“We know that growing our Hispanic membership base will not happen overnight,” said Huff. “Even after our successful soft launch there is much work to be done yet. We are taking a conservative approach to growing opportunities with all emerging markets to make sure we’ve set reasonable objectives and are meeting our plan’s milestones.

“Our initial goal is to grow five percent in Hispanic membership over the course of the upcoming year,” continued Huff. “Out of this, we would like between 60-65 percent of these new members to open a checking account and request a debit card. As we become more familiar with the Hispanic membership needs, and as they become more trusting of us as a financial institution, we will then focus on really growing loans with the new Hispanic membership.

“It is our objective to become the primary financial institution for Hispanics in the Atlanta market, especially Gwinnett County,” finished Huff. “And we’re willing to make the necessary investments to see this happen.”

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First Graduates of New Era Tanda Program Highlight Potential for Latino Lending

Posted by on October 15, 2013

Coopera client Travis Credit Union (TCU), the Yolo Family Resource Center (FRC) and Woodland, Calif., city officials recently honored the first class of graduates from the credit union’s New Era Tanda Program. Debuted in mid-2012, the program was designed to help Latino participants develop a 12-month shared savings goal and to take advantage of the credit union’s unique savings and loan offerings.

TCU worked with Coopera to develop the program concept for this unique program centered on tandas (also known as cundinas, sans or quinelas). Informal borrowing/lending circles, tandas are common in immigrant cultures, especially Latin American immigrant cultures. The modernized tanda, developed by TCU, aimed at bridging a cultural custom with the credit union experience.

Funded in part by a National Credit Union Foundation grant, TCU partnered with the Yolo FRC to conduct the pilot program. The program used a grassroots and culturally relevant approach tailored to the local Latino community. The first New Era Tanda Program class was composed of six people, each of whom was encouraged to attend monthly financial literacy courses, all offered in Spanish.

Participants contributed on a monthly basis to a shared savings account and also received a group share-secured loan to help save for a down-payment on a vehicle. In addition, after satisfactory completion of the program, each participant was eligible for a TCU credit-building credit card and/or auto loan. Throughout the program, participants and their families were encouraged to discuss how the various financial educational topics and the act of habitual saving affected their financial well-being.

The grant’s goal was to study, test and implement a savings and lending program that leverages a Latin American cultural tradition, the tanda,” stated Barry Nelson, executive vice
president of Travis Credit Union. “The program incorporates financial education, peer learning and social reinforcement and rewards to provide a valuable alternative to the consumer and to gain the trust of the local underserved Hispanic community.”

After graduating from the program in August, participants became eligible for TCU’s individual product offerings to meet their credit-building and/or vehicle-purchase goals.

The Results

As with any good pilot, measuring the results was incredibly important to TCU, NCUF and Coopera. TCU worked with Coopera to create pre- and post-surveys to measure and track the change in each participant’s financial beliefs and behaviors. These surveys were administered at the start and end of the program. One of the goals of the program was to build Hispanic members’ credit and good financial habits through financial education. The findings were exciting.

Here are some of the stats the TCU team reported back to the National Credit Union Foundation:
                            

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Congratulations to TCU, Yolo FRC and the New Era Tanda program participants on a job well done!

 

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Coopera, CUNA Join Forces for Bilingual Advocacy

Posted by on October 8, 2013

Coopera and the Credit Union National Association (CUNA) are working together on another exciting initiative this year. Together, the two companies are engaging in bilingual political advocacy with the launch of “No Le Cobren Impuestos a Mi Credit Union” (the Spanish-language version of the “Don’t Tax My Credit Union” campaign).

This endeavor with Coopera is a part of CUNA’s effort to involve its Spanish-speaking members in political advocacy that affects all communities across the country, including Hispanic communities. With language no longer a barrier, Spanish speakers will now be able to engage in important advocacy and political issues that affect their credit unions.

These issues affect all of us. At a time when Congress has made broad-based tax reform a major priority, it is more important than ever that all the voices of all our members are heard equally,” said Bill Cheney, president and CEO of CUNA.

The “No Le Cobren Impuestos a Mi Credit Union” campaign will include a Spanish-language toolkit, video message, action center and website. This campaign will also have all of the elements of the “Don’t Tax My Credit Union” campaign, including:

•         Website www.NoImpuestosAMiCU.org
•         Form letters on a Spanish action center for members to easily send to members of Congress
•         Print advertisements
•         A translated version of the take action toll-free number
•         Instructions for social media engagement
•         A Spanish-version logo
•         Posters, statements, stuffers, fliers and much more

The addition of Spanish language advocacy is the latest development in this large-scale, nationwide grassroots-mobilization campaign urging America’s 96 million credit union members to deliver a united message to Congress: “Don’t Tax My Credit Union.”

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Remittances Can Help Credit Unions Serve Hispanics

Posted by on October 1, 2013

Sending money home is very important to the Hispanic community. For credit unions looking to grow their membership base and revenue opportunities, offering remittance services (from branch locations, via phone or even online) is a great value-added tool to help build a strong relationship with the Hispanic community. The World Bank reported that remittance flows topped $530 billion in 2012. More than $63 billion of that total was remitted from the U.S. to Latin America and the Caribbean (a large percentage of that $63 billion was sent to Mexico and Central America).

Traditionally, remittance service providers (i.e. non-wire transfer services) have been outside of the financial service industry…think mom-and-pop grocery stores.

Currently, credit unions have a negligible market share in the remittance space.

But, the remittance landscape is changing. With new consumer-focused regulations (the CFPB’s remittance transfer rule regulation will take effect on October 28, 2013), all remittance providers will be impacted. Under the rule, “Remittance transfer providers are required to provide prepayment and receipt disclosures to the consumer sender that include the exchange rate, certain fees and taxes associated with a transfer, and the amount of money that will be received on the other end of the transfer. Remittance transfer providers will also be required to investigate disputes and correct errors.”

Many current providers are finding it hard to comply with the CFPB’s new rule and have chosen to get out of the service. But, this hasn’t changed the strong need for remittances, especially for Hispanics. It’s simply created a lot of uncertainly in the industry as to who will provide this service moving forward, and what that service providers will need to do to be able to offer remittances.

Credit unions are well-positioned to pick up where these other remittance service providers have left off. Beyond simply allowing Hispanic consumers another choice for sending money home to loved ones, providing remittance services also gives credit unions the chance to deliver more comprehensive financial services to this market segment.

This is why it’s so important for credit unions to understand the makeup of their local Hispanic community. For example, if a credit union has a large percentage of 2nd or 3rd generation Hispanics who are more acclimated into the U.S. financial system, adding remittance services to the business’s product portfolio may not be the right fit. But if the credit union has a large population of underserved Hispanics in the area, offering remittance services could make a lot dollars and sense.

With more than one in four households (nearly 30 percent) in the U.S. today is underserved (i.e. conducting all or some of their financial transactions outside of the mainstream banking system) — and Hispanics representing a disproportionate number of this group — the pursuit of this market for potential members may initially seem counterintuitive for a credit union. But, the underserved represent a large market opportunity. That’s because underserved Americans are a fast-growing and young population with growing incomes.

For the credit union, whose collective mission is “people helping people,” that supports such an underserved individual through a difficult time, the potential for life-long loyalty is huge. And underserved Hispanics, in particular, tend to have large households and live in tight-knit communities, creating more word-of-mouth opportunities for the credit union that serves them well. The outcome of adding tools like remittance services is a win-win for credit unions willing to embrace the opportunity.

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Latinas Are the New U.S. Economic Driving Force

Posted by on September 24, 2013

Latinas aren’t just looking for any financial services. Dignified financial services are what we want — the type that credit unions are known for. Latinas are decision-makers, they are wage-earners and they are increasingly bi-cultural; all of which are nuances to make note of and integrate in a credit union’s overall Hispanic growth plan.

One of the most notable nuances that credit unions looking to court this powerful consumer segment need to know is that Latinas aren’t assimilating.

Perhaps one of the most revealing findings of Nielsen’s Latina Power Shift Report is that Latinas aren’t assimilating in the same way that past generations of U.S. immigrants did. What’s occurring is that we aren’t losing our Latino culture overtime to become more American, we’re actually adding the American culture to our Latino culture and are increasingly becoming ambicultural®, a term coined by Nielsen specifically to describe this phenomenon.

What does this mean? It means we can switch back from the English language to the Spanish language without hesitation, we celebrate traditional American holidays and serve traditional Latin American foods at these events and we embrace our Latin American roots with our diverse group of both American and Latin American friends and family.

While this can pose some unique challenges and opportunities for credit unions to communicate to us, it’s not an impossible feet, in fact it just means credit unions must have a marketing and product strategy that
includes the right mix of communication. Blanket messaging in just English or just Spanish isn’t necessarily going to be as effective with this group. Multi-media channels, both English and Spanish communications and an appeal to both the American and Latino cultures are going to be essential to get us to act.

These nuances will require a new way of looking at marketing and product strategies to effectively reach Latinas. And, if you really want to serve your Latino community, you need to be connecting with Latinas — the new U.S. economic driving force.

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