One of the world’s most influential writers, Victor Hugo, once said, “Greater than the tread of mighty armies is an idea whose time has come.” And when it comes to embracing diversity as one of the credit union movement’s guiding principles, not only has its time come, but we risk having the opportunity pass us by if we fail to wholeheartedly embrace it.
Fifteen years ago, the leadership of the Iowa Credit Union League had a vision of how to better serve a rapidly diversifying population. Out of that vision and, in partnership with Warren Morrow, came Coopera, an organization specifically designed to tear down walls and build bridges between credit unions and the Hispanic community.
Since that time, Coopera has reached beyond Iowa’s borders to help credit unions nationwide serve the largest minority population segment in the United States. Ask any of those early adopters today, and it’s clear just how positive the impact of those efforts have been, both for the credit unions and the Hispanic members they serve.
But the past is only prologue to what lies ahead. Even with every credit union’s best intentions, previous efforts to increase diversity may have missed a critical need for representation at the highest levels, including the creation of diverse management teams and boards of directors. Such gap can certainly hinder our best efforts to continue broadening services to an increasingly multicultural membership base. In worst-case scenarios, credit unions run the risk of being less, rather than more inclusive, not only in providing services, but also in their governance and leadership structures. In the end, it is a matter of relevance.
Historically speaking, the global credit union movement has been guided by seven cooperative principles first drafted in 1844 by the Rochdale Society in England. These principles have been revisited over the years by other cooperative groups, but today include voluntary and open membership, democratic member control, members’ economic participation, autonomy and independence, education and training, cooperation among cooperatives and concern for community.
Although those principles do not specifically use the words diversity, equity and inclusion, each one of them touches on it in one way or another. All seven principles address the power of financial self-determination among members, but do not directly reflect the growing diversity of those members. Perhaps it’s time to make the credit union movement’s commitment more explicit. This is something that CUNA’s board addressed within the last month. It’s time to create leadership structures that better reflect the country’s changing demographics.
There’s been a lot of talk recently among credit union groups and individuals about taking action and making that commitment public. There will be even more conversations in the months to come. Given the current social and political struggles around these issues, credit unions – institutions that have been built on principles, not profits – must revisit, revise and restate those principles in ways that speak specifically to the 21st Century. These efforts start with each of us as individuals.
The Greek philosopher Democritus once said, “A wise man belongs to all cultures, for the home of a great soul is the whole world.” It’s clear the credit union movement was founded by wise men and women based on sound and equitable democratic principles. Let’s take those principles to decisively take the next step and make sure they include every member of our increasingly diverse population who needs and wants to participate equally and inclusively at all levels of their credit union, and, by extension, society.
Now, not later, is the time to act on an important idea whose time truly has come.Leave a comment
Credit union interest is growing in offering member business loans, or MBLS, even though strict regulatory limitations still exist. The lending rules are clear, but the amount of MBL dollars available differs based on a credit union’s size and the makeup and performance of its overall loan portfolio.
With fewer MBLs available compared to other loans, the ones credit unions do issue should be given to well-performing entrepreneurs with the greatest need, and who can do the greatest good with those funds for their community. In our minds, Hispanic-owned businesses should be top contenders when credit unions make their MBL decisions.
Does that surprise you? It shouldn’t. Hispanics are one of the country’s fastest-growing population segments, and also one of its most entrepreneurial. Moreover, loans to Hispanic-owned businesses are being increasingly targeted by banking industry competitors in a way that is frictionless and culturally relevant.
A 2018 Gfk Social and Strategic Research study surveyed Hispanic and non-Hispanic business owners about their beliefs and practices. These results may surprise you.
* Hispanic business owners are significantly more confident in overall economic growth than their non-Hispanic counterparts. In 2019, 68 percent of Hispanic owners believed their local economy would grow compared to 54 percent of their non-Hispanic counterparts. Although slightly lower, faith in national economic growth measured 59 percent and 55 percent, respectively.
* Concurrent with their optimism, Hispanic business owners raised greater levels of concern over the rising cost of doing business. Those concerns included everything from increasing health care costs (70 percent for Hispanic owners versus 63 percent for non-Hispanics) to continued strength of the U.S. dollar (59 percent versus 42 percent, respectively) to credit availability (45 percent versus 29 percent, respectively). Such cautionary concerns added to their overall optimism place Hispanic business owners in a stronger and more realistic position to effectively compete in an open marketplace.
Hispanic business owners surveyed about their future plans again outpace those of their non-Hispanic counterparts.
* In 2019, 74 percent of Hispanic-owned businesses expected to increase revenues, compared to just 57 percent of their non-Hispanic counterparts.
* For the same year, 51 percent of Hispanic owners plan to hire more staff, compared to 26 percent of non-Hispanic owners.
* Finally, 28 percent of Hispanic owners say they plan to apply for loans, compared to only 14 percent of their non-Hispanic counterparts.
This all adds up to greater optimism and market-readiness by Hispanic-owned business, 87 percent of which planned to expand their enterprise in 2019. It also means a greater need for available capital to help those businesses reach their lofty, but eminently achievable goals.
Credit unions need to play an active role in this process through member relations and MLBs. Your Hispanic members,a highly motivated and growing market segment whose successes will benefit both sides of the lending equation, are relying on you.Leave a comment
Hispanic Heritage Month is right around the corner! This year, the 31 days of celebration begin on Sunday, September 15, and end on Tuesday, October 15. During this special month, we recognize the centuries of contributions made to United States growth and development by Hispanics.
For credit unions that serve large Hispanic communities, public recognition and celebration of the month can both honor the heritage of members and build stronger relations between them and the institution. But even credit unions that don’t serve large numbers of Hispanics should recognize the importance of what has become one of the country’s fastest-growing population groups.
Many businesses find numerous ways to celebrate Hispanic Heritage Month. Here are a few ideas that you can use.
Host employee and member luncheons or receptions featuring food and beverages from Latin American countries. Nothing brings people together faster than food, and a buffet of authentic dishes would create real interest from your community to want to learn more about the Hispanic culture.
Hold a ‘lunch and learn’ event for staff that features a local Hispanic community leader. Find someone who can talk about the financial needs of the community and other topics that foster curiosity understanding and empathy. Too many people are reluctant to reach across the aisle and get to know people outside their social circle. This would be an excellent opportunity to break down a few barriers of cross-cultural communication.
Conduct a credit union-wide charity drive to raise funds for a Hispanic need or educational opportunity. In addition to helping a good cause, employee participation can help raise awareness and empathy among credit union members, board and staff, all of which are key to greater cultural awareness.
Aprende a hablar Español. (Learn to speak Spanish.) Whether it’s a new Spanish word each day for 31 days, impromptu dialogue lessons in the employee break room, or one-on-one tutorials between Spanish-speaking employees and those who want to learn, everyone benefits when everyone gets talking. Communication leads to understanding, and knowing the language is where it starts.
Take cultural field trips. Chances are there is more activity going on among local Hispanic community members than you might think. Seek it out and encourage employees to visit Hispanic cultural centers, art galleries, dances, concerts and even food carts. Task those employees to describe their impressions at weekly staff meetings. That way everyone learns from each other’s experiences.
¡Fiesta! Feeling ambitious? Host an outdoor concert and mini-fiesta one Saturday morning during Hispanic Heritage Month in the credit union’s parking lot, serving food and featuring a live local Latino entertainment. Such an event can attract members and nonmembers alike, perhaps even drawing local TV news coverage because of the music, colorful costumes and festive activities. It’s a very visible way to show support for the Hispanic community and maybe even gain new members in the process.Leave a comment
When I arrived in the United States in 1991 to study economics at the University of Wisconsin-Eau Claire on a Fulbright Scholarship, the first question people inevitably asked me was, “Where are you from?” I was born and raised in Panama, so the answer was easy each time I was asked. And I was asked the question a lot.
For the most part, I’ve lived in the U.S. ever since that time. I married my wife—a Wisconsin native— and settled in the city of Janesville where we raised a son and a daughter. I was granted U.S. citizenship in 2014 and carry a U.S. passport. And I still get asked the question, “Where are you from?” These days, the answer isn’t quite as simple.
Like many Hispanics in America, I identify strongly both with my country of origin and my adopted home. Fluent in both Spanish and English, I move comfortably in both worlds, and yet don’t feel fully a part of either one. There’s a duality to my life, an “in-between,” a situation that exists for many Hispanics. I tend to think of it as an “otherness,” with both feet planted firmly in each of two distinctly different cultures and not fully anchored to either one.
Fortunately, I’ve turned what some see as an insurmountable challenge into distinct opportunities. It took a while for me as a young man to learn the norms and behaviors acceptable in my new American home. But I was an eager student and made it a point to understand and accept changes without fully losing aspects of my Panamanian culture and heritage.
Since then, I’ve learned to use the traits of each culture to enrich and enhance my relationship with the other. My cultural duality has helped broaden my understanding, strengthen my skillset and move more freely and operate more effectively in a variety of settings. When you paint from a more diverse color palette, as they say, the end result is always both richer and brighter.
My two kids are, of course, part Panamanian and I do my best to keep that part of their lineage alive. But to them cultural duality is far more conceptual than it is an actual part of their daily lives. It has always been interesting to me the role that parents play in acculturation and assimilation in households with immigrant parents. Each one is very different.
As credit unions seeking to serve the Hispanic community, it’s important for you to understand the two worlds where Latino members navigate every day. We’ve said before that serving Hispanics is not a one-size-fits-all proposition. It’s a community of people as rich and varied as the number of countries from which they come, the social and economic strata in which they live, and the extended families that play so significant a role in each of their lives.
Now add to that the notion of duality and its impact on first-, second- and third-generation Hispanic Americans. Their cultural heritage will always be present, but the duality may fade as assimilation becomes more complete with each succeeding generation. The way you treat any of the generations when they come to the credit union seeking services is often the difference between success and failure.
Sound complicated? It doesn’t need to be. As a not-for-profit member service organization, it simply comes down to knowing your member and how best to meet his or her needs. The better you know Hispanic members the more effectively you will be able to serve them and the more business they will bring to the credit union. That’s a challenge that can result in greater opportunities for all.Leave a comment
Few things are more important to Hispanics than family. In fact, both the nuclear and extended families – las familias – are highly valued by the vast majority of Hispanics both in the U.S. and throughout Latin America.
It comes as no surprise that remittances, those funds sent to support family and sometimes friends, are an important part of many Hispanic household budgets. Credit unions that provide remittance transfer services are discovering how important and vital those services can be, especially given the growing U.S. Hispanic population and rising number of immigrants.
Some 58 million Hispanics live and work in the U.S. according to the Pew Research Center, comprising roughly 18 percent of the U.S. population. Add to that the growing number of immigrants and you have a very large number of people seeking to send remittances home to family members.
After a slight downturn in recent years, remittance activity among Hispanics has spiked with even greater growth anticipated. This provides credit unions a chance to serve more Hispanics and realize greater economic opportunities. In many Latin American households, remittances constitute a primary source of income, making the transferred money vital to those families’ financial wellbeing.
The remittance numbers are worth noting. According to a study led by the Center for Latin American Monetary Studies (CEMLA), 2017 remittances from the U.S. to Latin American and Caribbean countries totaled $77.02 billion, with an anticipated increase in 2018 to nearly $90 billion.
Remittances are sent through a variety of merchants, from banks to cafes to convenience stores, often at a cost of 7 to 9 percent of the total remittance amount. Credit unions, can process remittances at a more economical rate, easing the financial burden on senders and putting more money into the hands of the Latin American families who need it the most.
In recent years financial institutions have started partnering with fintechs to provide remittances. As many Hispanics are young digital natives, they use digital touchpoints to send money abroad. It is important to develop a digital strategy for remittances.
If you already serve or seek to serve Hispanics, consider ramping up your remittance program to help service the growing demand. As a source of transfer fee income and a member service opportunity, fulfilling this need can be unmatched among the services your credit union offers.
It also is an effective way to increase the number of Hispanic members and their loyalty to your institution, as well as help them preserve their cultural traditions of helping la familia.Leave a comment
Every new year brings new opportunities to create healthier lifestyle habits, establish goals and objectives for the coming year, and in some ways start life over. Unfortunately, most new year’s resolutions focus on physical health, rather than fiscal health. That’s an oversight few credit union members – or anyone, for that matter – can afford on their journey to long-term financial well-being.
Now is an excellent time for credit unions to help their Hispanic members improve their financial practices, foster wise money spending decisions and more effectively manage their own financial futures.
The first step is to help Hispanic members identify their financial goals for the new year. Here are a few questions credit unions can ask their members to help them chart the right course.
Is there anything you would like to stop or start doing financially? It is a simple yet powerful question that could make a member ponder. It is worth asking.
Asking these and other questions can be important in helping members set the course for a brighter financial future, one that might even give them the opportunity to take that long awaited vacation they have always wanted or make a larger purchase of something they need. It is difficult for credit unions or their members to understand or know how to reach their financial goals until those questions are answered.Leave a comment
This past year Coopera has had the opportunity to help multiple credit unions better serve their Hispanic constituents. We learned a lot in 2018, and we’re happy to see that both the credit unions and their Hispanic members benefited from our joint efforts.
Several critical trends emerged from among those 2018 successes. Here are three we believe have widespread application to credit unions across the nation.
1. Staff training opportunities have enabled more credit unions to share Hispanic market service and growth insights with employees at all levels.
Helping credit union staff – both new and experienced – understand the cultural nuances of serving all member segments has become an important growth strategy. In best-practice credit unions, cultural awareness training is no less important than financial and technological training, and it’s something we hope more credit unions embrace in the future.
Coopera is able to measure and score a credit union’s cultural sensitivity, enabling it to better communicate with Hispanic members. From that score, the credit union can adjust its operational thinking and practices so more Hispanic members feel understood and appreciated by the institution. Increased understanding, in turn, results in more and better service to those members, eventually leading to greater product engagement by Hispanic members in those credit unions.
2. Increased ITIN lending by credit unions both new to and experienced with such loans has resulted in larger loan portfolios and better member service.
Loans made using Individual Tax Identifications Numbers (ITINs) rather than Social Security numbers to verify identity are still new to many credit unions. But credit unions that understand the nuances of using this form of legal ID have discovered new and often untapped sources of loan demand and revenue. From payday loan alternatives to credit-builder loans to auto loans and even mortgages, the demand and opportunities for ITIN loans are helping both borrowers and lenders thrive.
Produced with the help of partner organizations, Coopera offers access to an ITIN lending guide that provides both recommendations and resources for such a program’s application and use. Access the guide free of charge here: https://filene.org/do-something/programs/non-citizen-lending.
While a program like ITIN lending is an opportunity to engage Hispanic members, credit unions offering only the foundation of such financial access without building a framework for its Hispanic members’ financial growth run the risk of losing those members to the competition. Coopera offers credit unions assistance in creating holistic solutions to help Hispanic members financially grow with the institution.
3. State credit union leagues are using Coopera’s solutions so that their member institutions increase membership to include Hispanics.
Leagues nationwide recognize their duty in providing tools for member credit unions grow, and more of them are finding greater growth by attracting Hispanic members by clearly showing the philosophical imperative and business case for it. As one of the fastest growing demographic groups in the U.S., Hispanics present significant opportunities for credit unions nationwide.
One of Coopera’s partner leagues, for example, has a goal of helping its credit unions reach 1 million members within the state. To assist them with this goal, Coopera provides “opportunity maps” identifying Hispanic groups for the league’s credit unions, enabling them to target, attract and serve members about whom they otherwise might not have known. We’re doing the same thing with other leagues as well, and look forward to future partnerships on projects such as this.
The initiatives outlined above illustrate how Coopera has actively helped the credit union movement reach out and better serve Hispanics throughout this past year. Coopera will continue these initiatives and actively exploring how to integrate more solutions and insights to reach underserved in the years to come.
We look forward to having you with us on the journey in the New Year!Leave a comment
A credit union’s income is largely driven by its loan portfolio, and there is a unique opportunity for even greater loan growth available to institutions willing to go the extra mile in serving immigrant populations.
Not everyone who works in the U.S. is considered a citizen, yet all are required to pay taxes on their earnings. Workers who don’t qualify for Social Security numbers must satisfy their debt to the IRS by registering for Individual Tax Identification Numbers, better known as ITINs.
More credit unions are starting to use ITINs to qualify borrowers for loans and other services, a move beneficial both to members and their institutions.
This is especially true for credit unions serving Hispanic and other underserved markets, but it should be noted that ITINs are not only for Hispanics and recent immigrants. Many workers from Canada, India and other countries pay their U.S. taxes through their ITIN accounts. Done correctly, loans using ITINs as proof of income can open a new world of borrowers for participating institutions.
This past month Coopera, in partnership with our sister company PolicyWorks, the Filene Research Institute and inclusiv (formerly the National Federation of Community Development Credit Unions) released the Implementation Guide: Individual Taxpayer Identification Number (ITIN) Lending. The 67-page publication, free to credit unions, offers a comprehensive, legally compliant approach to ITIN lending.
The guide consolidates best practices, tools and resources for credit unions wanting to reach this largely untapped market of immigrant workers who need the ability to more fully participate in the economic growth and development necessary to make their lives financially secure.
The guide evolved using testing results from the Filene Institute’s Reaching Minority Households Incubator, which measures products and service strategies for reaching financially underserved consumers. Coopera was a major collaborator in both the research study and implementation guide creation.
This guide couldn’t have come at a better time. There is a very strong business case for providing personal and automobile loans to what is an often-overlooked population segment. As with other financial products provided to the Hispanic community, the word is likely to spread among its members, resulting in an increase in member applications along with the resulting loan growth.
There also is an equally strong philosophical platform for ITIN lending. Providing members of this group greater financial stability and more active participation in the U.S. economy serves not only their needs but helps create a level of increased financial security that serves to further strengthen their community and society at large.
Credit unions are committed to serving the underserved, and this may well be the most underserved community of all.
Please feel free to contact any of us at Coopera for more information on ITIN lending and a copy of the guide. We are here to help.Leave a comment
When I accepted the position of CEO of Coopera earlier this month, my team gave me a framed quote that, in terms of the organization’s mission and my own personal career trajectory, couldn’t have been more profound.
The quote reads, “Hispanics need credit unions as much as credit unions need Hispanics.” It is attributed to Warren Morrow, the founder of Coopera.
To say that I was as moved by the gift as I was by the sentiments it expressed would be a significant understatement. In a mere 11 words, Warren’s statement outlined the future of both the credit union movement and that of Hispanics seeking to economically thrive in the United States. It also provides all of us with guidance in helping both communities cooperatively move forward in the new millennium.
Warren was born in Mexico City to an Anglo father and a Mexican mother, moving to Tucson, Arizona, while still in grade school. The need to assimilate helped define Warren’s character, but he never forgot nor abandoned his Hispanic roots. Providing higher education opportunities and helping create financial stability for Hispanic families became the mission and the passion of his too-short life.
Warren died unexpectedly in 2012 at age 34. Both Miriam De Dios Woodward, my predecessor at Coopera, and I had worked with Warren and are committed to following his guidance.
Warren realized early that credit unions’ cooperative nature aligned with the different Hispanic cultures. As the number of U.S. credit unions continues to decline and more nontraditional vendors fight for our financial business, it’s not unrealistic to believe that Hispanic communities may be the best and most likely hope for the future of the credit union movement.
Think for a moment about the parallels between the two entities. Despite their differences, the social cultures of various Hispanic countries are built on the strong foundation of family and community. Nothing is more important, and nothing else gives both the various cultures and their people their solidarity and strength.
It’s also fair to say that of all financial institutions, credit unions come the closest to establishing “communities” among their members. Their emphasis on member service helps foster the financial growth among those communities, much like Hispanic communities and families foster the social and emotional growth among their members.
Coopera exists to create a link between credit unions and the Hispanic communities they seek to serve. Through analytical study we can define exactly which Hispanic cultures predominate in each city, town or rural area. Our emphasis on digital and remote services can help credit unions reach those groups economically and address their needs in ways in which members themselves prefer to be served.
Hispanic members are like anyone else in terms of the products and services they need and want to survive and thrive in today’s economic environment. The difference is that, unlike other member groups, Hispanics put greater faith and trust in their communities, and credit unions that align with those communities will see greater loyalty and higher levels of service usage among those community members.
Warren Morrow knew that. Through Coopera and previous enterprises that he managed, Warren sought to strengthen the bond between Hispanics and credit unions through considerable effort and, probably, no small amount of prayer. His efforts and their effect are to be lauded.
Warren’s message still lies at the heart of Coopera’s primary mission, and it’s a promise we plan to keep to both credit unions and the Hispanic communities they seek to serve.Leave a comment
It was barely 10 months ago that I joined Coopera as client relations director, having just spent 20 years working with the global credit union movement as part of World Council of Credit Union’s executive staff. Today, I begin my tenure as Coopera’s CEO.
I’m still reeling at the tremendous opportunity I have been given. I’m thrilled to be leading the only organization devoted to helping improve financial services delivery through credit unions for U.S. Hispanic population members nationwide. What an honor!
I am thankful for the remarkable work former CEO Miriam De Dios Woodward has done building this organization. I’m pleased she has taken over the role of CEO of PolicyWorks LLC, Coopera’s sister organization that provides compliance solutions to more than 1,200 credit unions across the country.
As CEO, I plan to carry on the work Miriam started to increase services to a growing number of credit unions and other organizations seeking to effectively serve Hispanic communities and individuals. The market has never been larger, and the need for those services never greater.
Many people don’t realize that there are currently about 55 million Hispanics living in the United States. That makes the U.S. the world’s second-largest Spanish-speaking country after Mexico.
Hispanics also are the largest ethnic minority in the United States, and one that credit unions can most effectively serve through their cooperative structure and wide array of financial products and services.
As a native of Panama and first-generation immigrant, I have lived the American immigrant journey. I had the good fortune to come to the U.S. as a teenager on a Fulbright scholarship to pursue degrees in economics and Latin American studies at the University of Wisconsin-Eau Claire and I have been here ever since. I also have devoted my professional life to credit unions and have long promoted their ability to serve the Hispanic population.
The key factor many credit unions forget, however, is that an effective service profile is at no time found in a one-size-fits-all strategy.
Spanish may be our shared language, but each of us comes from a different culture. The culture in the Dominican Republic is different from that of Colombia, and Mexico is not the same as Cuba. Credit unions must first recognize the origins of their Hispanic members, then find ways to connect with their communities in order to gain the trust necessary to create a trust relationship with those members.
Helping credit unions do just that through analytical tools and strategic planning is part and parcel of Coopera’s mission. Credit unions that understand their current and potential Hispanic membership base can better develop the proper strategic approach to serve those members. Supporting that understanding lies at the core of Coopera’s services.
Given the current politics of immigration, the parameters for serving Hispanic members may seem very different from serving other member groups. Credit unions must be prepared to accept different forms of identification, for example, and be willing to partner with different community organizations to make sure Hispanics receive the financial and social support they need.
For credit unions, it becomes a case of self-examination. Does the credit union truly represent the field of membership that it’s serving? Are there Spanish-speaking employees, executives and maybe even board members who represent what has the potential to become a key constituency?”
For credit unions, effectively serving Hispanic members is much more than a case of just doing the right thing socially and politically. In a marketplace where competition increases while service opportunities decrease, building a strong Hispanic base can be the key to stability, relevancy and increased growth.
Credit unions with significant Hispanic membership often see both loan and deposit growth at rates higher than industry norms, while the average member age has decreased by about 10 years. There is a positive business case for serving the Hispanic market, one that shows the market’s relevancy and sustainability over the long run.
In the end, Coopera’s goal is to help credit unions succeed by understanding and creating empathy for people on the immigrant journey, much like the one I took.
Our industry really can’t ignore a group that in just a couple of decades will comprise one-third of the U.S. population. At Coopera, we’d like to help more credit unions meet their own goals, and successfully serving Hispanic members is an important part of that equation.
Speaking on behalf of Coopera’s excellent staff and myself, we’re all ready to work with partners both veteran and new in embracing a new era of success in serving Hispanic members nationwide.Leave a comment