New consumer profiles are emerging as key to the growth of credit unions, including the growing Hispanic market, immigrants, low-income households and Millennials. While the movement’s leaders may clearly see the need to adapt products, services and strategic plans to a new type of member, the resources to do it may not always be there.
Fortunately, there are programs designed to help, specifically the low income (LI) and community development financial institution (CDFI) designation programs.
This was one of several insights coming out of a collaborative round-table event we were proud to host alongside the Iowa Credit Union Foundation (ICUF) and the Iowa Credit Union League (ICUL). The topic was building understanding of the financial need of emerging markets and learning about resources available to best serve both existing and prospective members who comprise these critical consumer segments.
One of the things we discussed during the round table was that all the resources in the world will not help move the needle if credit unions don’t first understand the market they are trying to serve. To this end, attendees had the opportunity to participate in a live poverty simulation. The poverty simulation, or Life Simulation, is designed to help credit union employees, volunteers and leadership begin to understand what it might be like to live in a typical low-income family, one that is trying to survive from month-to-month.
In the simulation, participants assumed the roles of families whose members are unemployed, homeless, living on disability or raising grandchildren on a fixed income. At the end of the exercise, participants were more aware of the daily realities faced by many American families. In a post-event survey, 100 percent of attendees rated the poverty simulation very good or excellent, and ICUF Executive Director Jaimie Miller says plans are underway to offer the event to more Iowa credit unions in the future.
One attendee had this to say about the experience: “I was able to take away from the poverty session how frustrating it can be for people trying to find the right places for help. As a credit union professional, I think we can be more empathetic towards these members and also educate ourselves to learn and understand the resources available to them so we can help them even more.”
The poverty simulation was accompanied by a panel discussion. Our expert panelists included Joann Johnson, superintendent of credit unions in the state of Iowa; John Parks, CEO/manager at Sioux Valley Community Credit Union; Traci Stiles, business development manager at Des Moines Metro Credit Union; and Dale Owen, CEO/president of Ascentra Credit Union. They spoke about benefits of the low income and CDFI designations such as grant funding opportunities and also shared how these designations fit in with their work to better serve their entire field of membership.
Attendees were surprised to learn many Iowa credit unions, including Des Moines Metro Credit Union and Sioux Valley Community Credit Union, have already earned LI designations.
They also were excited by the types of programs these credit unions were in the process of developing or had developed thanks to their special statuses. Financial counseling and education, new technology and an expansion of loan programs are helping more cooperatives grow while more consumers find well-intentioned and fair services designed especially for them. In addition, if a credit union has a Hispanic growth program or is looking to start one, these designations can help further those efforts.
A strategic Hispanic growth program can become an important part of a credit union’s CDFI designation action plan. If we can assist you with the development of such a plan, please get in touch.Leave a comment