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  • 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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    Experiencing the Nuances of the Dominican Republic Culture First-Hand

    Posted by on March 19, 2013

    Guest blog post by Erin O’Hern, Compliance Attorney, PolicyWorks LLC

    In January, I had the opportunity to go to the Dominican Republic and participate in the International Credit Union Leadership Program with 11 other credit union professionals from across the U.S. It was an amazing experience that really opened my eyes to the unique culture that drives the Dominican Republic.

    Because many incorrectly assume all Hispanic people are similar, I wanted to share some of the insights I gained, into the Dominican culture specifically, during my trip.

    In the Dominican Republic, the definition of family is much broader than in the U.S. I may call my co-workers good friends, but the credit union employees at COOPBUENO call each other family — and they mean it. For example, the 8-year-old daughter of my host family could name each employee of the credit union, and even some of their relatives. For each person, she could also tell me funny stories about her personal experiences with them. When I was eight, I knew some of my dad’s co-workers (I even had nicknames for a few… “The One with the Beard” for example), but could never have told you each co-worker’s life story.

    Taking the time to socialize is very important in the Dominican Republic. Each morning, and before the employees leave in the evening, they stop at their co-workers’ desks to shake hands and ask a few questions about how things were at home or how the day was going. I worry I may have offended several employees at the credit union the first few days when I only said, “Hello, how are you?” and waved from across the lobby.

    And, the phrase “Mi casa es su casa” (My home is your home) is not an exaggeration in the Dominican Republic. It was not uncommon during my visit there for my host family and I to stop by a co-worker’s house to say hello and possibly share dinner. Then, of course, we visited the co-worker’s parent’s house, as well as the in-law’s house.

    In the Dominican Republic, it is very unusual for the next generation to move out of their parent’s house before they are married. In fact, the universities do not have dormitories because students either live at home or with a relative while they are studying. After attending a university, many graduates will live with their parents while they are beginning their careers.

    When I asked credit union employees about this, they all said it was a big part of their culture and a widely accepted practice. Although limited available housing and financial challenges do play a part in this custom, no one I talked with mentioned these as the main reason for remaining at home with their parents.

    When I mentioned to my host parents in the U.S. that a large portion of college students live either in dormitories on campus or in nearby apartments, and that young, unmarried professionals often live by themselves or with roommates, they asked why someone would need to move out of their parent’s house before marriage? They also suggested that it is too easy for young people to get into trouble by leaving their parent’s house so soon.

    Food is very important in the Dominican culture. Although, they do have specific dishes to represent a specific celebration or special gathering, such as sancocho (a multi-meat, multi vegetable stew), it is unusual for them not to have rice and beans for lunch every day. In the U.S., it would be difficult for many to select just a few food choices that are part of our cultural identity. For example, people may associate apple pie (or if you live in Iowa, corn) as an all-American food. But, it is easy to find people in the U.S. who do not like to eat apple pie. Interestingly enough, I could not find one person in the Dominican Republic who did not eat rice and beans. In fact, many were shocked to learn that before visiting their country, I had not eaten beans in over a year.

    I also observed that meal times are very different in the Dominican culture. Lunch is the largest meal in the Dominican Republic and can often last for several hours (depending on whether the person’s work hours allow it). And, meal times are another opportunity for families to spend time together. In fact, many people chose to eat at home as often as possible. For example, my host family’s children ate lunch in the home each day.

    Another reason food is important in Dominican culture is because they take pride in preparing it for their families. In many cases, meals are not as easy to prepare as they are in the U.S. because not every family has modern appliances in their kitchens. Even refrigeration can be an issue with power fluctuations, and families living in campos or barrios may not have electricity at all.

    The Dominican culture is a great example of hard working people that care deeply about their family, friends and neighbors. The spirit of the credit union movement compliments their community goals perfectly.

    Service to Hispanic members is not only critical for the success of today’s U.S. credit union movement, it is vital for bringing more Hispanic Americans — a largely underserved group — into the financial mainstream. Yet the Hispanic segment has many nuances; Dominican just one among many. This is part of the reason Hispanic outreach is so challenging — but also so rewarding. While it is difficult to better understand your Hispanic members, the potential reward is great.

    For 13 days in January 2013, 11 young credit union professionals were selected to participate in the International Credit Union Leadership Program, made possible by a grant from the U.S. State Department, World Council of Credit Unions and the support of the participants’ respective leagues and credit unions.

    Each was placed in a different credit union or credit union association across the Dominican Republic. From Iowa, Traci Stiles, Business Development Manager at Des Moines Metro Credit Union in Des Moines, Iowa, was placed at the newest credit union in the Dominican Republic, CoopOriental; Erin O’Hern, Compliance Attorney at PolicyWorks, was placed with COOPBUENO; Anna Peña, Client Account Coordinator at Coopera, was placed at COOPACRENE.

     Highlights from their experience will be shared in a series of blog posts.

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    Insights for Credit Unions from My Visit to the Dominican Republic

    Posted by on March 12, 2013

    Guest blog post by Traci Stiles, Business Development Manager, Des Moines Metro Credit Union

    In January, I was honored to be selected as one of 11 young credit union professionals from various parts of the U.S. to go to the Dominican Republic and participate in the International Credit Union Leadership Program. During the trip, I had the opportunity to visit the Dominican Republic’s newest credit union, CoopOriental, which is located in Higuey (a community located in La Altagracia, the easternmost providence in the Dominican Republic near Punta Cana).

    While at CoopOriental, I was able to closely observe daily practices, as well as review policies and procedures. I was greatly impressed by CoopOriental’s staff and operations and strongly believe their success can be attributed to four distinct best practices:

    – Strong relationship with business partners (SEGs)
    – Going directly to members
    – Extreme board involvement
    – Strong support from its league

    Strong relationship with business partners (SEGs)
    CoopOriental is not community-based credit union. Therefore, relationships with its SEGs or business partners are extremely important. To generate business for the credit union, the SEGs can pre-approve their own employees for loans, taking the decision-making component of the loan process out of the hands of the credit union.

    This works well at CoopOriental because the SEGs know their employees arguably better than the credit union could know them. This is particularly true when it comes to employees’ salary information. Having this insight into borrowers makes it easier for lenders to know if the requested loan amount is reasonable and if the borrower is a good credit risk. The other advantage is that SEGS can guarantee loan repayment to the credit union through employee payroll deductions.

    Although there are many challenges to making this concept work in the U.S., I do think creating a stronger bond and layer of trust between a credit union and its SEGs is critical. These relationships can offer much less risk in lending. And, SEGs are a great referral source for credit unions, especially when working with the Hispanic community.

    Going directly to the members
    Because it is hard for members in rural areas to make regular trips to credit union branches in the Dominican Republic,  many credit unions employ a messenger service (via moped) to pick up deposits and loan payments from members. The idea is simple: Go to the members, rather than expect them to come to you.

    This concept could be easily applied to U.S. credit unions with SEGs that are far away from the credit union’s headquarters or SEGs with a large concentration of members in one location. By offering messenger service, credit unions can offer a convenience that other financial institutions don’t offer them, making it easy and affordable to make deposits to their accounts and pay on their loans.

    Extreme board involvement
    During my time in Higuey, I stayed in the home of the president of CoopOriental’s board of directors. My host father visited the credit union daily to sign checks and discuss business with the manager. But he wasn’t the only board member actively involved in the credit union’s business. The entire board was very passionate about the credit union and actively promoted the credit union in the business community.

    What this involvement proved to me was the importance of having an active board, one with a deep understanding of the day-to-day operations of the credit union and a willingness to promote the credit union whenever possible.

    League involvement
    Just like leagues in the United States, the League in the Dominican Republic (AIRAC) strongly supports their member credit unions. Because CoopOriental is still new in the market, I saw the League support their business through regular staff training and access to technology.

    For 13 days in January 2013, 11 young credit union professionals were selected to participate in the International Credit Union Leadership Program, made possible by a grant from the U.S. State Department, World Council of Credit Unions and the support of the participants’ respective leagues and credit unions.

    Each was placed in a different credit union or credit union association across the Dominican Republic. From Iowa, Traci Stiles, Business Development Manager at Des Moines Metro Credit Union in Des Moines, Iowa, was placed at the newest credit union in the Dominican Republic, CoopOriental; Erin O’Hern, Compliance Attorney at PolicyWorks, was placed with CoopBUENO; Anna Peña, Client Account Coordinator at Coopera, was placed at COOPACRENE.

    Highlights from their experience will be shared in a series of blog posts.

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    Case Study: Evolving Efforts Result in Success

    Posted by on March 5, 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.

    In 2005, Patsy Van Ouwerkerk, president and CEO of Travis Credit Union, headquartered in Vacaville, Calif., and the credit union’s Board of Directors and senior management team recognized many Hispanics in their local communities were underserved and were thirsty for dignified, affordable financial services.

    Nearly 40 percent of California’s residents identify themselves as Hispanic, and that number is predicted to continue climbing at a rapid rate.

    “At the time, we identified an advantage our credit union had over other area financial institutions,” said Travis Credit Union Director of Corporate Relations Shérry Cordonnier. “Whereas other providers were looking to prey on underserved individuals, we truly wanted to partner with them. We also knew there was only a small window of opportunity to build and capture loyalty with potential Hispanic members. As such, we implemented several programs to strengthen our efforts to attract and retain Hispanic members.”

    Many of these programs, Cordonnier added, continue today.

    Travis CU began its initial Hispanic outreach that year by partnering with Filene Research Institute to better understand the size and needs of the local Hispanic market. With this background information, they began to formulate strategies and initiatives for better targeting members in their communities. Realizing their initial activities were working and overall membership was increasing, the cooperative decided it was time to take its efforts to the next level — the development of a comprehensive, strategic plan that would be sustainable for the long term.

    “We had already set our strategic direction when I was introduced to Warren [Morrow, late CEO of Coopera] who was speaking at a conference about how Coopera was helping credit unions with their Hispanic outreach efforts,” said Cordonnier. “Not many financial institutions were doing this type of outreach at that time, so we needed a partner that could help us pioneer new activities and help us be true innovators. After talking more with Coopera, we knew they would be able to help us get to that level.”

    To kick-off a partnership with Coopera, Van Ouwerkerk invited Morrow to participate in the credit union’s Board spring planning session in 2009. The credit union initially utilized the firm’s consulting services to develop strategies for becoming more visible to potential Hispanic members in the communities they serve. At Coopera’s recommendation, the Travis CU team implemented the Hispanic Opportunity Navigator (HON) to get a snapshot of how effective they had already been in serving the Hispanic community and to identify what opportunities may be in the future.

    The credit union also worked hard to bolster its grassroots marketing efforts, said Cordonnier. Some of those initiatives include:
    • becoming active in local organizations, such as family resource centers, churches and Project Head Start and Hispanic chambers of commerce
    • working with organizations of diversity and their local board of directors
    • partnering with community leaders to provide assistance to immigrants
    • getting involved with local academic and educational programs that influence the Hispanic demographic
    • developing an internal bilingual advisory group
    • developing strategic partnerships with organizations to influence the Hispanic demographic
    • developing relationships with local and regional Hispanic media to educate Hispanics about the differences between banks and credit unions

    Since initiating these programs, Travis CU, serving members out of 22 locations in Northern California, has realized 5-percent membership growth year-over-year, and now counts Hispanic members as 20 percent of its overall membership.

    To further evolve its outreach efforts, Travis CU initiated two new programs to position the credit union as a trusted financial advisor in the Hispanic market.

    The first program, New Era Tanda, debuted in 2012. It is designed around Hispanic tandas (also known as cundinas, sans or quinelas). Informal borrowing/lending circles, tandas are common to Latin American cultures. The modernized tanda, developed by Travis CU, is aimed at bridging a cultural custom with the credit union experience.

    Funded by a National Credit Union Foundation grant, Travis CU is piloting the New Era Tanda program with two groups in Solano and Yolo counties. Each group is composed of six people and helps participants develop a 12-month shared savings goal and to take advantage of the credit union’s unique savings and loan offerings. The program offers monthly meetings with financial literacy courses offered in Spanish.

    After graduating from the program, New Era Tanda participants are then eligible for individual product offerings to meet their credit-building and/or vehicle-purchase goals. Due to the anticipated success of the pilots, Cordonnier said Travis CU might consider making the New Era Tanda a permanent program available in the credit union’s 22 branch locations in the future.

    Travis CU also launched an immersion program in 2012, aimed at bolstering the credit union’s current employee training efforts. The goal of the immersion program is to illuminate the immigrant experience for Travis CU employees, making them more sensitive to Hispanic members’ needs and challenges.

    During a series of cultural immersion sessions nearly 140 Travis CU employees took their training from the classroom to the real world. Visiting Mi Pueblo Food Center in Vallejo, Calif., and El Tejaban restaurant in Vacaville, employees at both businesses were instructed to speak only in Spanish to Travis CU employees, allowing them a first-hand experience with the challenges of being understood as a foreign–language citizen.

    “The exercise placed Travis employees in the same situation as our Spanish-only speaking members, demonstrating to them what it might be like for those members when they visit the credit union,” said Cordonnier. “In return, our employees gained a new empathy for many of our Hispanic members and what they experience every day. The training focused on treating these members with respect and dignity, reading body language and the importance of understanding and communicating the credit union’s products and services in both English and Spanish.”

    According to Cordonnier, the training helped provide Travis CU employees a better understanding of the credit union’s current outreach efforts and the need for additional trainings in the future. In addition, the training helped employees overcome concerns, fears and anxiety related to serving members not like themselves. As a result of the program, Cordonnier and the senior management team at Travis CU have noticed the employees are more accepting of the credit union’s Hispanic outreach efforts and have taken steps to share their experiences with others. They regularly initiate more efforts, including asking Travis CU to provide financial vocabulary lists in Spanish, more training, bilingual staffing, additional marketing and more involvement in Hispanic events.

    Also, noted Cordonnier, employees have become more active in local community organizations. An an example, Eric Maldonado, Travis CU’s community involvement officer for Contra Costa County, is currently serving a term as President of the Contra Costa County Hispanic Chamber of Commerce, which has been recognized as the 2012 Hispanic Chamber of Commerce of the Year in California.

    “By gaining a better understanding of our Hispanic members,” continued Cordonnier, “Travis employees now help our leadership team develop better strategies to increase membership, grow revenue and boost loan volume with this important demographic.”

    Another by-product of the immersion program has been the building of trust with local Hispanic merchants in the communities Travis CU serves. The programs have been well-received by these businesses, as many have brought the merchants new customers and revenue growth opportunities, as well as opened the door for new partnerships in future outreach efforts.

    In recognition of their outstanding community outreach efforts, Travis CU was named the Community Leader of the Year by the Solano County Hispanic Chamber of Commerce in October, 2012. “This award is usually given to an individual,” said Cordonnier. “It is an honor to be the first business to ever receive it.”

    Because of its successful investment in the local Hispanic community, Travis CU plans to implement more immersion training sessions in the future to make sure all employees have the opportunity to participate. They also hope to add more bilingual staff and offer more products and services targeted to their Hispanic members’ needs.

    “As we continue to enhance our Hispanic outreach programs to build awareness for our credit union within the communities we serve, we know that the investment we’re making has not only been good for the strategic growth of the credit union,” concluded Cordonnier, “but has also proved to be important to the overall credit union movement. We have seen first-hand that our mission of ‘people helping people’ is truly the right approach to take as we work to build trust with, and provide much-needed services to, this growing market.”

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