In 2006, Des Moines Metro Credit Union (DMMCU), headquartered in Des Moines, Ia., performed an in-depth analysis to determine whether opening a new branch was the best way to grow their membership base. The credit union had endured several years of negative membership growth and wanted to reverse that trend. The analysis revealed that DMMCU was not maximizing opportunities to best reach and serve the households around the credit union’s existing locations. Before they could successfully open a new branch, the credit union’s leadership decided it would make sense to improve penetration in their current markets.
“We determined that the local Hispanic community was an ideal demographic target for growth,” said Traci Stiles, DMMCU business development manager. “Our branch is located near the Des Moines Hispanic community’s homes and workplaces. We knew we could gain board and staff support to offer much-needed services that would meet Hispanic members’ financial needs. It made a lot of sense for us to become a more active member in this community.”
Stiles and her team knew they would not be able to take the credit union in this new direction without help. They turned to Warren Morrow at Diverse Innovative Solutions, which later became Coopera, to guide them. “Coopera has been a key resource for us,” said Stiles. “In collaboration with Coopera, we have been able to keep up-to-date on best practices in the financial industry, as well as the Hispanic community, to gain new ideas for better serving our membership.”
The Coopera team has also been able to help DMMCU better understand the differences between Hispanic consumers and other DMMCU members. Armed with this knowledge, the DMMCU leadership, with Coopera’s guidance, has also been able to develop products and services that best match the Hispanic community’s cultural and lifestyle nuances.
One of the first products DMMCU implemented was remittance services through Vigo. Also, DMMCU initiated a credit builder loan program. “Our Credit Builder Loan has been the most successful product we’ve implemented to date,” said Stiles. “We started the program in the fall of 2009, and we’ve had over 65 members who have graduated from the program. The program has given us the opportunity to help members with one-on-one financial education as they build their credit. We’ve had minimal risk by using consistent underwriting guidelines, and the program has created loyal, life-long borrowers for DMMCU.”
In the first quarter of 2012, DMMCU also began offering the Coopera Prepaid Reloadable Visa card, a prepaid card program tailor-made for the Hispanic market. According to Stiles, the Coopera Card has turned out to be a popular product with the credit union’s entire membership. “We have sold more than 165 Coopera Cards since the launch.”
As DMMCU’s Hispanic outreach has evolved, the credit union has enhanced its member referral program to capitalize on the increased referral potential offered by the Hispanic community. Today, any current DMMCU member who refers a new member to the credit union gets entered into a monthly drawing for $100.
Products and services were not the only areas the credit union re-tooled to better focus on growing DMMCU’s Hispanic membership. According to Stiles, DMMCU also had to examine its current policies and procedures to make sure they accommodated growth in the Hispanic market. “We examined and altered our policies to allow Hispanics to use matricula consular cards and ITINs to open accounts,” said Stiles. “We also educated our staff about various forms of compliant identification.”
In addition, Stiles and the DMMCU team re-evaluated their marketing efforts to best target the Hispanic community. Today, the credit union’s efforts include bilingual materials, member testimonials and advertising in the local Hispanic media. For example, DMMCU recently used a testimonial from a female Hispanic member who was able to purchase her first car through the credit builder program. “We make sure to solicit feedback from our bilingual staff on existing and new products and services. Also, we make them aware of our community advertising campaigns to make sure we are doing everything we can to be successful,” said Stiles.
“We also track the language preferences of our members so when we do a bilingual direct mail piece we can identify members who speak Spanish,” added Stiles. “We also use Coopera’s Hispanic Member Analysis and Hispanic Opportunity Navigator to track our progress with our target market on a monthly and quarterly basis. Whenever we consider operational, product, or service changes/enhancements, we have to keep the Hispanic market in mind because they are becoming a larger part of our membership. Coopera has been instrumental to our success in each of these areas — from providing us with best practice examples to hosting quarterly and yearly board updates to helping us with reporting and benchmarking.”
DMMCU has become heavily involved in community outreach efforts, such as the Bank On Central Iowa* initiative. This program brings together financial educators, banks and credit unions to help improve financial education and access to underserved consumers, including Hispanics. “We strive to continually form partnerships with businesses and organizations, like Hispanic Educational Resources, that serve the Hispanic population in our area. We participate each year in the local Latino festival during Hispanic Heritage Month, as well as provide volunteers for other cultural events throughout the year.”
For a credit union of DMMCU’s size, Stiles feels the cooperative has made huge strides in serving the Hispanic community. The biggest indicator of success, according to Stiles, is membership growth. “Prior to our efforts with the Hispanic community, we were experiencing negative membership growth,” said Stiles. “In 2009, we began to see positive membership growth and have had positive growth every year since. Our average member age also continues to decrease. We have built the solid foundation with our board, staff and local community, and as a result, we are really seeing our hard work pay off.
The results are not always quantitative, said Stiles. “Our Hispanic members have told us how much they appreciate the friendly, individual attention our bilingual employees provide — we’ve built a strong foundation of trust with them,” added Stiles. “We strive to make sure they feel respected and are given affordable alternatives to higher-cost financial services.”
Stiles offered up these final insights: “My advice would be no matter how big or small, if a credit union has buy-in from all levels of the organization — the board, management and staff — it can successfully serve the Hispanic market, or any target demographic. It’s also important to monitor, track and recognize when processes, procedures, products and services need to be evaluated and adjusted. When you lay the proper foundation, you are bound to have success.
“I’m very proud of what we’ve accomplished at DMMCU,” concluded Stiles. “It’s positive for our credit union’s growth, and because our members have the opportunity to take advantage of affordable financial services, it’s very rewarding for them, our credit union, and the credit union industry.
For more information about the Bank On Central Iowa initiative, visit the article “Financial Education Helps Out Unbanked” in the Des Moines Register. An online version of the article is available at: http://www.desmoinesregister.com/article/20130702/NEWS/307020041/Financial-education-helps-out-unbanked?Frontpage.Leave a comment
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)
Strong relationship with business partners (SEGs)
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
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
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.
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.Leave a comment