Through Partnerships (and Great Videos) Ascentra Credit Union Accelerates Financial Education Initiative
To fully understand the reason Ascentra Credit Union is using its grant funds the way it is, it’s helpful to consider two important stats:
• 90 percent of Hispanic consumers stream video on their mobile devices.
• 7 in 10 Hispanics regularly use YouTube.
With the grant funds, the credit union has translated 16 video scripts into Spanish for a series of financial education videos. Not only are these videos available on Ascentra’s YouTube channel, they have also been airing on its local NBC affiliate, KWQC-TV, serving the Quad Cities area of southeastern Iowa and northwestern Illinois. The videos are available on the television station’s website, as well.
In addition, the grant funds enabled Ascentra to add Spanish subtitles to their existing financial education videos.
“The Warren Morrow Hispanic Growth Fund Grant has been instrumental in providing lasting and ongoing content in Spanish for Ascentra’s Financial Wellness program,” said Alvaro Macias, Ascentra AVP of community development. “We are now in the process of working with our local Spanish/English newspaper Hola America News to use their social media channels to share these informative one-minute videos to effectively reach local Spanish-speakers.”
Ascentra is also offering a series of financial education presentations in partnership with Esperanza Legal Assistance Center, a low-cost immigration service provider. The grant provided the funds needed to translate three presentations into Spanish. Spanish-language flyers were distributed throughout the predominantly Hispanic neighborhood in which the center is located, and the content was also used to promote the seminar on Facebook.
“We have plans to further utilize the translation services; we have some brochures that need to be translated and are planning to re-launch our website later this year,” Marcias said. “Our goal is to have the entire website available in Spanish.”Leave a comment
A recent study on the significance of gender for Hispanic savings and retirement found two important things:
1. Hispanic women have a huge appetite for financial education and a strong desire to save
2. Their savings could provide a critical safety net to America’s largest minority group.
“This study demonstrates that if financial information is communicated simply and respectfully, and in culturally and linguistically competent ways, Latinas, especially, will listen,” said Karen Richman, Ph.D., the principal investigator of the study, a collaboration between the National Endowment for Financial Education and the University of Notre Dame.
Reasons for Low Retirement Savings
Despite a desire to save, low earnings mean Hispanic women have much lower retirement account balances than any comparable demographic, the study found. Employment paths have a lot to do with these outcomes. According to the study, Hispanics switch jobs more frequently than other demographics. What’s more, they tend to accept positions that do not provide retirement savings benefits.
The research went on to show that Hispanics with employer-sponsored retirement plans are 50 percent more likely than whites to make hardship withdrawals. Hispanic women are more likely than Hispanic men to liquidate pensions with a lump-sum payment or to spend rather than reinvest their savings when they change jobs. Additionally, Hispanic women tend to see retirement accounts as a source of liquidity. They may take loans and early withdrawals, often to help others, and they end up paying large penalties.
How Credit Unions Can Help
Below are a few key takeaways from the study and what they mean for credit unions.
• Hispanics have the highest labor participation, and yet the lowest retirement security. Hispanic women would benefit from workplace financial education, particularly during job transitions as they are deciding what to do with retirement accounts. Credit unions can provide financial education, as well as investment and savings products in a way that’s relevant to this influential and growing audience.
• Hispanic women tend to be the administrators of family finances. The female head of the family often makes tough decisions without knowing all the options. Credit unions can address Hispanic women’s appetite for financial education and desire to save through direct outreach, relationship building and financial education opportunities. A great way to gain a better perspective on what Hispanic women need is through the creation of a Latina advisory group.
• Hispanic men and women are equally likely to participate in collective financial practices based on “confianza,” or “mutual trust.” Credit unions should work to develop relationships with Hispanics based on trust. They should position themselves as a dependable resource for the community through product accessibility, bilingual staff and community investment.
As this study reveals, a gap exists for Hispanic women in terms of saving for retirement. Credit unions, with their financial expertise and their people helping people philosophy, are well positioned to address this gap.Leave a comment
With the grant funds it was awarded, Members Credit Union was able to purchase Spanish seminar-in-a-box kits from CUNA, as well as materials for financial education sessions with Hispanic youth. Partnering with local organizations to conduct seminars has been a successful strategy for the Connecticut credit union.
More than 80 consumers participated in three seminars Members Credit Union conducted in late 2017:
In October, the credit union partnered with Family Centers to host a Spanish financial education seminar for parents who live in low-income housing. The following month, Members Credit Union conducted a Spanish financial education seminar for participants of People Empowering People. In December, the credit union hosted a seminar for Family Centers staff, many of whom are Hispanic. The focus of that event was on both personal finances and services available to their Family Centers clients.
“Each one of the completed seminars brought new members to the credit union, and referrals from our ‘first generation’ of new members are spreading and also yielding new members,” said Kathy Chartier, Members Credit Union president/CEO.
One of the participants in the November seminar owns Latin Colors magazine. During the seminar, he gave a testimonial about how he has benefited from his relationship with Members Credit Union. He is also giving the credit union the opportunity to share financial education in Spanish in every issue of Latin Colors throughout 2018 in addition to partnering on future seminars.
Members Credit Union also has plans to continue offering seminars in 2018, including:
• Sessions with elementary and middle school students involved in the Family First program
The credit union is already seeing results from its financial education efforts in terms of Hispanic membership and loan growth. In 2017, the credit union brought in 73 new Hispanic members (39 percent of all new members), compared to 23 (12 percent of new members) in 2016.
“The seminars, and the word-of-mouth referrals they have created, are probably our greatest source of new members and loans in 2017,” Chartier said.Leave a comment
In an article ranking the best cities for Hispanic entrepreneurs, WalletHub asked a panel of minority-business experts about the biggest challenges faced by Hispanic entrepreneurs. Nearly everyone mentioned access to capital and financial education.
“There is a clear issue with lack of access to capital to start and grow their venture,” said Pedro F. Moura, an MBA candidate at the Haas School of Business at University of California. “This is also influenced by cultural aspects in which Latinos would rather rely on family and friends for funding than outside investors. Plus, limited financial education also plays a crucial role in understanding the funding that could be unlocked by entrepreneurs.”
What does this mean for credit unions?
This means Hispanic communities represent a huge opportunity for credit unions to grow their lending business – and become those communities’ preferred financial provider. If there is a known preference for borrowing from family and friends, the question for credit unions becomes, How can we build and nurture a similar relationship with Hispanic members?
Below are a few strategies to consider.
Offer small business-friendly loans. Small-dollar loans or Small Business Administration (SBA) loans up to $5,000 can be a great way to help entrepreneurs get their ideas off the ground. With an SBA 504 loan, for example, a borrower may only need 10 percent of equity, rather than the 20 percent required with a more traditional loan. Also, the loan is normally divided into two parts. One, which tends to be 50 percent of the loan, is held by a lender. The rest is held by nonprofit groups, such as the Certified Development Corporation, with this portion backed by the SBA.
Provide microloans. Microloans are typically very small (under $500) short-term loans with a low interest rate, extended to self-employed individuals, new startups with very low capital requirements or small businesses with only a few employees. Microloans can be a good source of funding for a business to hire its first employee, cover startup costs or purchase initial inventory.
Offer Individual Taxpayer Identification Number (ITIN) loans. ITIN loans are designed to help people who have a tax ID number but are not eligible for a Social Security number. Credit unions see the possibilities in serving a population that is not being served well by traditional financial institutions and they understand the value of inclusivity.
Provide lines of credit and credit-building loans. During the early stages of developing their companies, entrepreneurs may not have diversified enough to generate a constant positive cash flow. Lines of credit accommodate the seasonal credit demands of businesses along with ups and downs in cash flow. They also enable entrepreneurs to purchase inventory in anticipation of future sales. Credit-building loans, on the other hand, can help entrepreneurs build their credit as they work to grow their business.
Offer small-business financial education. Even the most robust small-business lending program can be ineffective without the right education plan in place to help entrepreneurs understand their options and select the right loans for their businesses. Ensure your marketing and education materials are available in Spanish and are culturally relevant to Hispanic populations.
Build community partnerships. One of the best ways to expand your credit union’s Hispanic entrepreneur outreach efforts is to partner with organizations that offer small business assistance for Spanish-speaking entrepreneurs. Examples include local Hispanic chambers of commerce and small business incubators.
Credit unions desiring to be Hispanic entrepreneur-friendly should work to build the right mix of lending products supported by a strong financial education program. Those that get it right will not only provide a much-needed service to Hispanics in their communities, they will also benefit themselves through lending and membership growth.Leave a comment
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
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.
“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
“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
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.”Leave a comment