Case Study: Promoting Economic Justice

Posted by on March 26, 2013

What follows is a case study excerpt from the Hispanic Opportunity Report developed as part of the California and Nevada Credit Union Leagues’ newly formed partnership with Coopera.

Hispanic outreach has been an important part of Santa Cruz Community Credit Union’s (SCCCU) mission since it was founded in 1977. Today, 35 percent of the credit union’s 11,500 members identify themselves as Hispanic.

Certified as a community-development credit union, as well as a low-income credit union, SCCCU’s founders believed in empowering those who have been marginalized by the status quo, including those in the Hispanic community. From inception, SCCCU’s leaders have made it the credit union’s goal to promote positive social and economic change in the communities they serve.

“Promoting economic justice is about ensuring our members have access to financial services, financial education, and most importantly, capital,” said Beth Carr, SCCCU’s CEO. “While not all of our Hispanic members are low income, a good portion of them live and work in low-income areas.

“It is our mission to make sure these members have full access to economic opportunities and resources to make effective financial decisions,” continued Carr. “It is our goal that members realize their dreams for income, housing, education and business ownership.”

According to Carr, SCCCU’s Hispanic outreach is composed of several facets, including financial education and counseling, partnerships with local Hispanic non-profit organizations, tailored lending programs and low-cost financial products, as well as bilingual staffing and marketing materials.

Financial education and counseling
SCCCU offers financial education workshops to members and non-members in the community. These programs are geared toward helping people understand the basics of budgeting and saving, the benefits of banking, how to manage credit and debt, as well as how to read credit reports and understand scoring.

For example, the credit union has conducted financial education workshops through partnerships with the Watsonville Law Center, La Manzana Community Resource Center and El Pajaro Community Development Center. Because these workshops are tailored specifically for Hispanic attendees, they are conducted in Spanish and cover topics like the benefits of banking and having bank accounts, how to develop a saving and spending plan, understanding debt and consumer rights and responsibilities. Over the last three years, an average of 85 new clients signed up for these programs each year, said Carr.

“The credit union has a large segment of members who are check cashers,” said Carr. “These members do use their savings account and apply for loans; therefore, building educational programs that include financial stability for our members is critical.”

Carr continued, “These financial education programs have been well-received by the Hispanic community. Our outreach efforts have built relationships with people who are often distrustful of financial institutions. Outreach and education have combined to position SCCCU as a community partner and advocate.”

In 2011, SCCCU workshops reached more than 1,600 people, and by the end of the third quarter of 2012, their programs had helped an additional 1,515 people. Carr estimates that 40 to 50 percent of their workshop participants are Hispanic.

Community partnerships
Over the years, SCCCU has participated in a number of joint outreach efforts with non-profit organizations serving the Hispanic community. Much of the credit union’s community development work is implemented through Santa Cruz Community Ventures, the 501(c)(3) affiliate of SCCCU.

“Working closely with local organizations with deep connections to our Hispanic community is key,” said Carr. “These partnerships provide a conduit for our credit union to do financial education, teach the value of saving, borrowing and credit building, as well as help underserved Hispanic members open accounts in a safe environment.

“The most wonderful thing about having these partnerships,” continued Carr, “is that we have many successful Hispanic business owners and partnerships led by well-off and highly educated Hispanic community members. Not only are they well connected to the needs of the community, they also help us develop effective inroads to reaching people. It’s a win-win.”

Through Santa Cruz Community Ventures, SCCCU has a strong leadership role in “ChildCare Ventures” — a program in collaboration with the Central Coast Small Business Development Center, El Pajaro Community Development Corporation, the Human Resources agency of Santa Cruz and the Santa Cruz County Office of Education Child Development Resource Center. This program is designed to ensure local communities have access to the necessary childcare services working families so desperately need. And according to Carr, the credit union also manages a childcare loan program that supports local childcare businesses.

“We believe childcare programs must have access to business management training and funding in order to keep pace with the rapidly increasing childcare needs,” said Carr. “The ChildCare Venture program includes assistance in facilities development, land use and real estate, as well as gains appropriate loan products.”

Also, SCCCU recently hosted a Mexican Consulate’s Matricula Consular ID event. SCCCU team members were on hand during the event to support the Consulate’s staff as they worked to sign up Mexican residents for proper identification, as well as to provide financial education and counseling when possible. According to Carr, the event was a big success: 600 people attended the event to get identification cards, and in the weeks following the event, account openings in SCCCU’s Watsonville branch increased nearly 5 percent as a result of the credit union’s participation.

Lending programs and low-cost financial products
Due to no credit or poor credit, low income or a lack of understanding about the right financial tools, access to loans continues to be a challenge to a significant segment of our Hispanic community, said Carr.

“We want to be a part of the solution and are in the process of developing metrics to help us measure our efforts,” continued Carr. “We plan to reach out to the farm communities with more power in the future, and we are laying some preliminary groundwork for this effort right now.”

In addition to their extensive financial education outreach effort, SCCCU has expanded their lending programs through community partnerships and grant funds, such as OFN Jobs USA and the CDFI, to help low-income and economically challenged individuals and businesses. And, the credit union offers VITA — a free tax assistance service to help its members and community claim tax credits without having to pay any preparation fees; they also have a pay-day loan alternative program.

Another of SCCCU’s lending programs, Roses, allows for the opening of no-interest savings accounts for individuals without social security numbers. According to Carr, most banks in their county require two forms of ID for customers to open an account, but SCCCU members can establish a Roses account with only one form of ID, typically their Matricular Consular card.

SCCCU also offers Individual Development Accounts (IDA) to help members start saving for key life goals, like higher education, buying a home or starting a business. Participants are required to complete money management courses and training related to their specific financial goals, as well as to put money toward their goal into their savings account each month. When account holders reach their savings goals, the program matches their funds dollar for dollar to double their return.

According to Carr, SCCCU has 104 members enrolled in the IDA program, and of those participants, 30-40 percent are Hispanic.

Bilingual staffing and marketing materials
To best serve its Hispanic membership population, approximately 55 percent of the credit union’s staff members are bilingual. And, SCCCU publishes a bilingual, online quarterly newsletter that contains useful news and educational content, as well as information on promotional offers, to keep members up-to-date on special enrichment programs and the credit union’s community involvement efforts.

Also, according to Carr, SCCCU’s marketing department makes sure marketing materials within the branches are available in both English and Spanish. “These materials help establish a welcoming and inviting environment for Hispanic members by creating a more language-neutral atmosphere,” added Carr. “For example, we maintain bilingual brochures on topics like identity theft — these materials help our Hispanic members understand their rights, and they provide them with the tools to resolve problems related to this type of fraud.

“We believe everyone should have the chance to begin a new chapter toward personal sustainability,” concluded Carr. “Through our community partnerships and resources, we are able to help members achieve success in their life plans. Our Hispanic members have expressed their appreciation for our efforts to promote their financial well-being, and we continue to be proud of the work we are doing to support this vitally important segment of our community.”

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