Associated Credit Union, headquartered in Norcross, Ga. (20 miles northeast of Atlanta), is one of the state’s oldest financial institutions. Chartered in 1930 to provide low-cost financial services to its members, Associated Credit Union’s mission has evolved and now includes better serving underserved populations, including the Hispanic community. To do this, Associated Credit Union laid out a multi-year, comprehensive strategic initiative and is in the process of implementing it.
“Several years ago, Associated Credit Union’s executive management team looked at the demographics of the Atlanta metro market from the 2010 Census numbers for opportunities to grow our membership base,” said Annia Reyes, training manager at Associated Credit Union. “The data drove our credit union to the strategic decision to focus on the emerging Hispanic population.”
What Associated Credit Union discovered through its research was that the overall Hispanic population in the metro Atlanta area at the time of the Census was estimated at 530,000. From a county perspective, Gwinnett County, which houses six out of Associated Credit Union’s 28 branches, contained the largest population of Hispanics at an estimated 190,000 and was noted as one of the fastest growing counties for Hispanics in the state. In fact, it is estimated that by 2020, 40 percent of the population in Gwinnett County will be Hispanic.
Equipped with this information, Associated Credit Union turned to Coopera for guidance. The credit union utilized the company’s Hispanic Opportunity Navigator (HON) to better understand what was needed to serve the local Hispanic community.
Thru further research, Associated Credit Union discovered that the median age of the Atlanta metro Hispanic market was quite young, between ages 25 and 26, with annual personal earnings ranging from $17,000-$23,000. And, this trend was expected to continue for years to come, as 11 percent of K-12 students in the Atlanta area were Hispanic.
“With Coopera’s help, we were able to put together a rough sketch of our project plan,” said Huff, project management manager at Associated Credit Union. “We then customized the plan to best meet our objectives and to best serve our new members. We knew we needed to find out what Hispanics in the Atlanta market really needed and wanted out of a financial institution.”
Led by a 15-person implementation team, comprised of both management and frontline staff, Associated Credit Union began to lay the foundation and framework for this initiative. The process included gaining a better understanding of staffing needs, an evaluation of products and services, as well as the development of promotions and new marketing materials. It also included internal education and communication. “With this strategic initiative, we were dramatically changing the culture of the organization to become more diverse,” said Reyes. “We are not only committed to our members but to also our staff. It’s crucial that our employees are well informed and receive consistent, on-going training.”
The implementation team quickly took charge, initiating periodic staff training meetings on Wednesday mornings before the credit union opened for business, as well as, putting together staff events around local celebrations like Cinco de Mayo. Reyes, Huff and members of the implementation team also held monthly meetings with Associated Credit Union’s executive management team, as well as provided regular updates to the management team during the bi-weekly managers’ meeting. “Building a solid Hispanic outreach initiative is a marathon, not a sprint,” said Reyes. “We had full buy-in from the credit union from the beginning, and it was our job to keep things fresh and exciting during the process to make sure everyone stayed motivated through implementation. Keeping the lines of communication open at all levels of the credit union has been critical.”
Initially, the plan was to roll out the project in four branches, but as the implementation team continued to work on the initiative, they decided instead to “soft” launch in one branch first. “We tweaked our rollout strategy because of the reality of staffing needs and the learning curve, both internally and within the community,” said Huff. “We did a market analysis of Associated Credit Union’s entire operations area, which helped us determine that we needed to focus our initial efforts in our Norcross branch location. We then worked to hire bilingual staff in that branch, as well as in all of our customer-facing departments (i.e. the call center, loan processing center and so on).”
At this point, Associated Credit Union hired its first branch manager from outside the organization in 30 years. The candidate was bilingual and had industry experience that would help lead the charge in the Norcross branch.
Initial launch efforts have focused on word-of-mouth outreach, as well as advertising in a local Spanish newspaper, Mundo Hispánico. Also, Associated Credit Union’s marketing department worked to create bilingual versions of the credit union’s most-used collateral, including membership applications, deposit slips and product and service handouts.
The credit union also worked to make sure its products and services were able to meet the needs of all its members, including Hispanics. The implementation focused on making sure Associated Credit Union’s rate-reward loan program and first-time car buyer programs were available during the soft launch, as well as working with Associated Credit Union’s vendors, like its reloadable prepaid debit card supplier, to make sure these vendors’ customer-facing departments offered bilingual support. The credit union is also investigating adding remittance products in the near future to make sure the credit union is meeting the money transfer needs of the Hispanic marketplace.
Other future initiatives include adding a Spanish page to the credit union’s website, as well as broader community outreach efforts, such as financial literacy programs and local business partnerships.
“We know that growing our Hispanic membership base will not happen overnight,” said Huff. “Even after our successful soft launch there is much work to be done yet. We are taking a conservative approach to growing opportunities with all emerging markets to make sure we’ve set reasonable objectives and are meeting our plan’s milestones.
“Our initial goal is to grow five percent in Hispanic membership over the course of the upcoming year,” continued Huff. “Out of this, we would like between 60-65 percent of these new members to open a checking account and request a debit card. As we become more familiar with the Hispanic membership needs, and as they become more trusting of us as a financial institution, we will then focus on really growing loans with the new Hispanic membership.
“It is our objective to become the primary financial institution for Hispanics in the Atlanta market, especially Gwinnett County,” finished Huff. “And we’re willing to make the necessary investments to see this happen.”Leave a comment
Coopera client Travis Credit Union (TCU), the Yolo Family Resource Center (FRC) and Woodland, Calif., city officials recently honored the first class of graduates from the credit union’s New Era Tanda Program. Debuted in mid-2012, the program was designed to help Latino participants develop a 12-month shared savings goal and to take advantage of the credit union’s unique savings and loan offerings.
TCU worked with Coopera to develop the program concept for this unique program centered on tandas (also known as cundinas, sans or quinelas). Informal borrowing/lending circles, tandas are common in immigrant cultures, especially Latin American immigrant cultures. The modernized tanda, developed by TCU, aimed at bridging a cultural custom with the credit union experience.
Funded in part by a National Credit Union Foundation grant, TCU partnered with the Yolo FRC to conduct the pilot program. The program used a grassroots and culturally relevant approach tailored to the local Latino community. The first New Era Tanda Program class was composed of six people, each of whom was encouraged to attend monthly financial literacy courses, all offered in Spanish.
Participants contributed on a monthly basis to a shared savings account and also received a group share-secured loan to help save for a down-payment on a vehicle. In addition, after satisfactory completion of the program, each participant was eligible for a TCU credit-building credit card and/or auto loan. Throughout the program, participants and their families were encouraged to discuss how the various financial educational topics and the act of habitual saving affected their financial well-being.
“The grant’s goal was to study, test and implement a savings and lending program that leverages a Latin American cultural tradition, the tanda,” stated Barry Nelson, executive vice
After graduating from the program in August, participants became eligible for TCU’s individual product offerings to meet their credit-building and/or vehicle-purchase goals.
As with any good pilot, measuring the results was incredibly important to TCU, NCUF and Coopera. TCU worked with Coopera to create pre- and post-surveys to measure and track the change in each participant’s financial beliefs and behaviors. These surveys were administered at the start and end of the program. One of the goals of the program was to build Hispanic members’ credit and good financial habits through financial education. The findings were exciting.
Congratulations to TCU, Yolo FRC and the New Era Tanda program participants on a job well done!
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Coopera and the Credit Union National Association (CUNA) are working together on another exciting initiative this year. Together, the two companies are engaging in bilingual political advocacy with the launch of “No Le Cobren Impuestos a Mi Credit Union” (the Spanish-language version of the “Don’t Tax My Credit Union” campaign).
This endeavor with Coopera is a part of CUNA’s effort to involve its Spanish-speaking members in political advocacy that affects all communities across the country, including Hispanic communities. With language no longer a barrier, Spanish speakers will now be able to engage in important advocacy and political issues that affect their credit unions.
“These issues affect all of us. At a time when Congress has made broad-based tax reform a major priority, it is more important than ever that all the voices of all our members are heard equally,” said Bill Cheney, president and CEO of CUNA.
The “No Le Cobren Impuestos a Mi Credit Union” campaign will include a Spanish-language toolkit, video message, action center and website. This campaign will also have all of the elements of the “Don’t Tax My Credit Union” campaign, including:
• Website www.NoImpuestosAMiCU.org
The addition of Spanish language advocacy is the latest development in this large-scale, nationwide grassroots-mobilization campaign urging America’s 96 million credit union members to deliver a united message to Congress: “Don’t Tax My Credit Union.”Leave a comment
Sending money home is very important to the Hispanic community. For credit unions looking to grow their membership base and revenue opportunities, offering remittance services (from branch locations, via phone or even online) is a great value-added tool to help build a strong relationship with the Hispanic community. The World Bank reported that remittance flows topped $530 billion in 2012. More than $63 billion of that total was remitted from the U.S. to Latin America and the Caribbean (a large percentage of that $63 billion was sent to Mexico and Central America).
Traditionally, remittance service providers (i.e. non-wire transfer services) have been outside of the financial service industry…think mom-and-pop grocery stores.
Currently, credit unions have a negligible market share in the remittance space.
But, the remittance landscape is changing. With new consumer-focused regulations (the CFPB’s remittance transfer rule regulation will take effect on October 28, 2013), all remittance providers will be impacted. Under the rule, “Remittance transfer providers are required to provide prepayment and receipt disclosures to the consumer sender that include the exchange rate, certain fees and taxes associated with a transfer, and the amount of money that will be received on the other end of the transfer. Remittance transfer providers will also be required to investigate disputes and correct errors.”
Many current providers are finding it hard to comply with the CFPB’s new rule and have chosen to get out of the service. But, this hasn’t changed the strong need for remittances, especially for Hispanics. It’s simply created a lot of uncertainly in the industry as to who will provide this service moving forward, and what that service providers will need to do to be able to offer remittances.
Credit unions are well-positioned to pick up where these other remittance service providers have left off. Beyond simply allowing Hispanic consumers another choice for sending money home to loved ones, providing remittance services also gives credit unions the chance to deliver more comprehensive financial services to this market segment.
This is why it’s so important for credit unions to understand the makeup of their local Hispanic community. For example, if a credit union has a large percentage of 2nd or 3rd generation Hispanics who are more acclimated into the U.S. financial system, adding remittance services to the business’s product portfolio may not be the right fit. But if the credit union has a large population of underserved Hispanics in the area, offering remittance services could make a lot dollars and sense.
With more than one in four households (nearly 30 percent) in the U.S. today is underserved (i.e. conducting all or some of their financial transactions outside of the mainstream banking system) — and Hispanics representing a disproportionate number of this group — the pursuit of this market for potential members may initially seem counterintuitive for a credit union. But, the underserved represent a large market opportunity. That’s because underserved Americans are a fast-growing and young population with growing incomes.
For the credit union, whose collective mission is “people helping people,” that supports such an underserved individual through a difficult time, the potential for life-long loyalty is huge. And underserved Hispanics, in particular, tend to have large households and live in tight-knit communities, creating more word-of-mouth opportunities for the credit union that serves them well. The outcome of adding tools like remittance services is a win-win for credit unions willing to embrace the opportunity.Leave a comment