As first seen on CUInsight.com.
Credit unions used to depend on social events to connect with their Hispanic community – events such as Hispanic Heritage Month festivals, financial education seminars, etc. In the era of social distancing, credit unions have been challenged to find new ways to connect with their members through digital platforms. Here are three recommendations for ways to engage with the Hispanic market in 2021:
Get comfortable in front of the camera.
Today, one of the most engaging ways to promote a product or service is through short videos like TikToks and Reels. According to Clarita’s 2020 Hispanic Market Report, 23.4% of the U.S. millennial population is Hispanic. By 2025, 27% of the U.S. Gen Z population will be Hispanic. These two segments are in their prime borrowing years. Therefore, credit unions must go to where potential new members are consuming the most information, so consider joining TikTok or Instagram.
While the millennial and Gen Z populations may not be your target market at this moment, it would be beneficial to include them in your marketing strategy. These are two populations that need financial services. Gen Z for example, might not be attending your financial seminars on Zoom, but you could catch their attention with a minute-long video on one of their favorite social platforms.
Make online banking enrollment accessible.
One of the most common questions Coopera received from credit unions embarking on a Hispanic growth strategy is, “How tech savvy is this community?”. There is a misconception that Hispanics don’t use technology at similar rates as compared to other demographics. Contrary to belief, most technology reports suggest otherwise. Claritas found that Hispanic consumers are more likely to carry out day-to-day banking transactions online. This is not surprising to me, as I have witness members of my own family utilizing their smartphones to stay connected with our family in El Salvador and to make everyday purchases.
When Hispanic members have low online banking and mobile app penetrations, I attribute the lack of engagement to communication issues in regard to the availability of those digital options. Spanish-speaking members may not be aware that they can enroll in online banking, or that their credit union has a mobile app for members. Consider these questions:
Check out Valley Strong Credit Union, who took it a step further by creating a Spanish Facebook page to ensure their information was accessible to a Spanish speaking audience.
Prepare for potential members’ due diligence.
It is important that your online messages align with how you want to be known among the Hispanic community. Whiles Hispanics are loyal to brands, it takes some time to earn their trust. For a long time, Hispanics have relied on word of mouth to learn about resources in their community. Without social gatherings, it is important that you spread positive messages about the credit union online. Encourage members to leave a review online about their experience with the credit union, especially reviews in Spanish. This would present the diversity of your membership and their satisfaction with the credit union.
Don’t let COVID-19 hold your credit union back from engaging with Hispanic consumers. Use this time as an opportunity to enhance your digital channels to welcome new users. Online outreach and engagement can drive membership growth and product penetration if done from an inclusion mindset.Leave a comment
By helping reevaluate the rules, the regulatory experts at your CU can open entirely new pathways for entirely new members.
COVID-19 made life extraordinarily difficult for a lot of people in ways they never anticipated. Adults that had never experienced a job loss, an inability to pay their bills, even homelessness or food insecurity, found themselves navigating unfamiliar financial territory. Many are still very much in the throes of their struggles and searching for support and resources.
Credit unions were built to offer hope in exactly these circumstances—to give their neighbors, all of whom were traditionally excluded from banking services, a safe, trustworthy way to access financial resources—especially during times of economic downturn.
That said, credit unions must also keep themselves out of financial trouble. Doing so requires them to adhere to a set of rules and regulations. It’s a rigorous, complex process made possible by the establishment of policies and procedures that leaders can train staff to follow. The trouble with many of these policies and procedures is they are built to address the mainstream, the traditional, the usual.
But, if we learned anything in 2020, it’s how quickly the usual can change.
Reevaluating the Rules
As the industry confronts a new normal in which members’ needs—and members themselves—begin to look different, compliance and risk leaders have a sizable opportunity to contribute. That’s because they are the chief owners of policies and procedures, not to mention the resident experts on all things regulatory in nature. By helping colleagues reevaluate the rules they’ve been following, compliance and risk leaders can open up entirely new pathways for entirely new members.
This is particularly true for consumers struggling with pandemic-related impacts that have pushed them out of mainstream financial services.
Expanding What’s Permissible One Policy at a Time
Take an individual who is experiencing homelessness, for example. Especially as economic forecasters warn of a foreclosures wave due to the pandemic’s impact on jobs, this is a circumstance that credit unions must be prepared for. Account opening procedures mandate that a credit union collect a physical address, which could be difficult for a prospective member experiencing homelessness to provide. Compliance and risk pros can review existing polices to be sure they encompass the full scope of permissible physical addresses. For instance, Title 31 Chapter X concerning customer identification programs states that an address must be collected. However, the regulation also allows for individuals without an address to provide one belonging to next of kin or of another contact individual.
Acceptable ability-to-pay documentation is yet another area compliance and risk leaders can help credit unions adapt for a broader range of assistance to a broader group of people. Methods and technology for evaluating creditworthiness are evolving, and plenty of alternative providers are taking advantage of them to prey on desperate people turned away by banks. With guidance and support from compliance and risk colleagues, credit union lenders and their teams can use the same strategy, except for good.
Members who are not U.S. citizens are another group of people in great need of financial assistance and guidance as the nation moves toward COVID-19 recovery. Many were left out of the stimulus package relief because of the lack of a Social Security number. Higher degrees of poverty and a higher level of employment in jobs that can’t be done remotely has put immigrants and their families at higher financial (and health) risk during the pandemic.
Compliance and risk pros can reevaluate policies and procedures to ensure identification forms other than a Social Security number are not only allowed but welcomed. A major part of executing an inclusive approach is going beyond acceptance to enthusiasm. If credit union staff are familiar with and comfortable checking international passports, ITINs or Matrícula Consular ID cards, for example, they are much more likely to nurture a welcoming atmosphere for people who want to join the cooperative.
Reengineering Escalation for a Better New Member Experience
Speaking of a welcoming atmosphere, compliance and risk leaders can have an impact in this area by helping design an escalation process that feels smooth and hospitable. When frontline staff understand what to do and to whom to go when they are presented with an unfamiliar form of identification, the prospective member feels accommodated and accepted. Particularly in underserved, close-knit communities, that kind of experience can kick off a highly successful word-of-mouth campaign that brings many new members to the credit union’s doorstep.
Involving Compliance and Risk Early On
Change is hard for many people, and it can be even harder when hindered by fear of running afoul of the law. This is where experts in regulatory compliance can step in. For those leaders to have the greatest impact, however, they should be involved in strategic discussions around growth and evolution as early as possible. It’s not uncommon for a credit union to build a financial inclusion plan without the upfront input of their compliance and risk folks. This, unfortunately, perpetuates a misguided stereotype compliance pros continuously battle—that they lead the “No” department. Getting these folks involved from the outset ensures financial inclusion programs are in alignment with the credit union’s regulatory obligations and strategic compliance aspirations.
Keep in mind, too, that compliance and risk leaders can serve as influential champions of inclusion. Because they touch so many areas of a credit union’s operations, they typically have a large internal network. Allowing them to be a part of developing a financial inclusion strategy and associated program may mean more team members see the value of the initiative and get involved to an even greater degree than expected.Leave a comment
Credit union partners developed new strategies and resources to reach Hispanic membership during the pandemic in 2020. Watch the vlog to hear Kenia’s forecast for the upcoming year and her tip to being prepared.
Credit unions have an opportunity to position themselves as trusted financial partners of the immigrant community. Last month, the Supreme Court of the United States ruled in favor of the Deferred Action for Childhood Arrivals (DACA) program. This immigration program was created through an executive order from President Obama in June 2012. For the last eight years, the DACA program has helped many immigrants fulfill dreams and achieve success in this country, by providing deportation relief and work authorization. Credit unions were at the forefront of providing financial services to the first DACA beneficiaries. We witnessed credit unions create “Dreamer Loans” to help individuals pay for their legal and immigrant fees. Now that DACA has been given new life, will credit unions rise to the challenge once again to help with the obstacles young immigrants face?
DACA recipients are aware of the vulnerability of the program because it is not a law. The September 2017 decision by the Trump Administration to rescind the DACA program left many young immigrants in a challenging position. After a three-year legal battle between federal courts and the administration, the case was ultimately heard by the Supreme Court. The administration has decided to continue accepting DACA renewals while limiting the term from two years to one. It was also decided that they will not be accepting first-time applications and most advance parole applications. This contradicts the Supreme Court’s ruling and immigrant advocates are planning to challenge their decision.
Terminating the program would negatively impact immigrant families, our healthcare system, essential workers, and the economy as a whole. The Center for American Progress estimated that more than 1.1. million undocumented immigrants met the basic DACA requirements. Roughly 825,000 immigrants have been granted DACA at some point during these eight years, leaving approximately 300,000 young immigrants who would qualify to apply for the first time.
Credit unions play a very important role in the lives of immigrants. From opening accounts and providing services to those who have Individual Taxpayer Identification Numbers (ITIN) and alternative forms of identification.
If the administration moves to accept first-time applications, about 300,000 young immigrants will need assistance to pay for their legal and immigration fees. These individuals do not have social security numbers. Here are some steps to take to assist them:
– Ensure your policies are welcoming of individuals with ITINs. A member may be considered an unauthorized immigrant today, but may obtain a legal status later.
– Repackage a personal loan as an immigration loan. This will help your credit union with marketing and awareness among an immigrant population.
– Partner with non-profit and legal service providers to support their efforts to help young immigrants complete their first-time and renewal DACA applications.
– Expand your scholarships to include both undocumented and DACA recipient students, as they cannot access federal aid to pay for higher education.
Credit unions helped DACA recipients back in 2012. Since then, they have built long, lasting relationships and many have even financed their first mortgages with the same credit unions that lent them money for that first-time DACA application. Here is an opportunity to help young immigrants again. Is your credit union ready?Leave a comment
As first seen on cuinsight.com.
Experts have predicted that this is the year the U.S. Latino population will comprise the majority of new household formations and, correspondingly, new home purchases.
The last decade has seen the U.S. Latino population emerge as the fastest-growing demographic in an increasingly diversifying nation. We know that the 59.9 million Latinos who currently call the U.S. home account for one in every five members of the U.S. population. Thanks to anticipated continued growth, Latinos will comprise one in every three members of the U.S. population by 2050.
Along with population growth comes an escalating and formidable financial impact. We’ve already seen it happening nationwide, with significant increases in savings and buying power and a dominant growth rate in labor force participation. For most of us, our ultimate financial goal is home ownership, and more Latinos than ever before are participating in the housing market. Their participation will only increase as the population continues to grow.
Research data from the National Association of Hispanic Real Estate Professionals (NAHREP) bears this out. In 2018, Latinos represented a net gain of 362,000 new homeowners. This raised the rate of new Latino homeownership to 47.2 percent of all new homeowners, compared to 46.2 percent in 2017. Over the past decade, Latinos have accounted for 62.7 percent of all new U.S. homeownership gains, NAHREP reports, growing from 6.3 million homeowners during the period to nearly 7.9 million homeowners by 2018. By 2030, researchers anticipate that 56 percent of all new homeowners will come from the Latino market, which will then dominate the sector.
Plainly put, this is a sea of change in the market that could sink mortgage lenders who are not prepared to tap into it. Credit unions, known for working with their members, may be in a better position than other lenders to ride the wave to increased success. However, not all institutions are well prepared in reaching out to Latinos in meaningful ways. Lose enough of these opportunities among Latino borrowers, and rest assured their other business will follow.
To reach this growing market, you must understand and respect the ways in which the Latino community differs from the more traditional market your credit union may already be serving. And even within the Latino market, there is diversity based on age, family structure and country of origin. My team analyzes geographical Latino markets to determine potential-member product needs and growth strategies to attract what is often an underserved or unbanked community.
Understanding is the key to everything – from marketing approaches to operational success. The more specialized your efforts are, the more successful they will be. The basics, of course, include involving bilingual staff at all levels who are well trained and culturally sensitized to the needs of Latino members. Creating a corporate culture from the board of directors to the teller line that not only accepts, but embraces this market is a necessity for success.
For a more nuanced approach to marketing, NAHREP again offers some research-based observations. Research data has shown that Latinos believe advertising is meant for them when it includes people who look like them (52 percent), reflects their cultural values (59 percent), and recognizes their cultural background (61 percent). Integrating those sensitivities in all member communications as well as exploring other operational alternatives [including making loans using Individual Taxpayer Identification Numbers (ITINs)] are critical steps in reaching this market.
Not every credit union is comfortable making such changes at first, but those that do are already seeing an increase in Latino home mortgage business. Reach out to your Latino community to help more members join the swell of new homebuyers. Explore holistic secondary market options like Inclusiv’s Mortgage. Create an environment in which everyone – lenders and members – can ride the wave of financial success.Leave a comment
Communicating with members is important, and the current pandemic has led to a flurry of change and resources. Don’t let your minority members get lost in the shuffle! Check out the video above to learn about three things you should be communicating to minority members.
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Coopera Client Relations Director Kenia Calderon Ceron recently traveled to Houston, TX to meet with a credit union about Latino member growth and strategic planning.Leave a comment
Credit unions across the country are finding it challenging to hire new staff. Competition for good candidates from among a seemingly limited talent pool is fierce. A strong economy and increasing worker demand make hiring tough enough, but the rapidly diversifying population adds its own layer of both challenge and opportunity.
Hispanics represent the fastest-growing population segment in the United States, which, in fact, is now the world’s second-largest Spanish speaking country after Mexico. These growth trends are set to continue – the U.S. Department of Labor predicts that one in every two new employees entering the workforce by 2025 will be Hispanic.
Attracting and retaining Hispanic employees soon will become critical to credit union success, if it hasn’t already. Recruiting Hispanic community members for open positions goes beyond simply having bilingual signs, flyers and ads. Here are some strategies for hiring success.
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Posted by Kenia Calderon on May 15, 2019
Coopera is dedicated to helping both credit unions and Latino communities across the country grow together to realize their dreams and successes. We’re always pleased and excited to see and support such efforts in action.
When we come across a credit union that goes above and beyond in helping Latino communities, especially the most vulnerable ones, we’re absolutely thrilled. That happened in April when $55.7 million Des Moines Metro Credit Union (DMMCU) stepped forward to financially support its staff members participating in the second annual 5K run and fundraiser in support of DACAmented students on the Iowa State University campus.
DACA stands for Deferred Action for Childhood Arrivals, a program that allows youths under the age of 16 entering the United States to work in country for two years before having to reapply for a work permit. The current political environment poses a threat to the future of the DACA program, which primarily affects Latino immigrants. The program’s success is critical to the Latino community’s growth and personally important to me since I, too, am a DACA recipient.
DMMCU had already provided exemplary service to its Latino members and critical support to its DACA community. The credit union offers a Credit Builder loan program that enables DACA recipients to pay application fees and other costs associated with their immigration processes.
DMMCU also offers loans for members using ITINs and supports local community events such as the Iowa Latino Heritage Festival and the Warren Morrow Latin Music Festival, an event named for Coopera’s late founder. More than half of the credit union’s staff members are bilingual, and some are DACA recipients themselves or have friends who are.
By supporting staff participation in the DACA 5K run, DMMCU took its message of support directly to the streets, or at least the Iowa State campus, to stand in solidarity with DACA recipients and promote how financial institutions can support the community outside of their branches. Funds raised by the run will help support the financial needs of DACA students attending the university, none of whom are eligible for government aid such as FAFSA.
As the fastest-growing ethnic group in the United States, Latinos are playing a weighty role in the present and future of this country. DACA recipients are the Latino community’s next generation, and their ability to fully participate in the American society is critical not only to their success, but that of the country at large.
According to a University of California – San Diego study, 95% of DACA recipients are either working or in school, 63% worked their way up to a better job, 54% bought their first car and 12% bought their first homes. They are active participants in the U.S. economy, in many cases thanks to help from their credit unions.
Supporting DACA recipients will be critical to the continued growth of both the Latino community and the credit union movement. What is your institution doing to foster and support the process?Leave a comment