David Suarez, bilingual community development manager at Iowa’s Community 1st Credit Union, says insists the key to building connections with Hispanic members is trust. “We have to gain that trust in the community,” he said. “We conduct outreach with community leaders, schools – even soccer teams – so we can show them we are offering not only services, but education. Typically, they are very interested to learn, but it’s important to know they may not have the basic knowledge of financial concepts. You have to get close to them to understand their particular point of view and their particular issue. Only then can you begin to develop the clear, simple messages you need to start them down the path to financial success in the U.S.”
Among the connections Suarez and the Community 1st leadership has built is a partnership with the Mexican Consulate of Omaha, Guadalupe Sanchez Salazar. Shortly after building a relationship with Sanchez Salazar, the credit union signed an agreement to collaborate for the benefit of Mexican nationals that live in Iowa. As part of that agreement, any Community 1st member with a matricula consular card and Individual Taxpayer Identification Number (ITIN) has access to nearly all of the credit union’s products and services, including mortgages. This will be hugely important to the credit union as it looks to serve more Mexican immigrants, which today make up 75 percent of Iowa’s immigrant population. Suarez pointed out the credit union is also working with the IRS to help more of its community members obtain ITINs. “We’re excited to help the community understand that with this number comes great advantages, such as checking accounts, loans and potentially even a mortgage.”
In addition, the credit union is working with Iowa State University’s Extension and Outreach agency, which connects Iowans with the university’s research and resources. The agency is helping the credit union understand the education levels of the Hispanic community members local to the 15 communities PFCU serves through 17 locations in Iowa and northern Missouri.
CU Achieves Juntos Avanzamos Designation
In 2016, the credit union was given the Juntos Avanzamos designation, which translates to “Together, we advance. Awarded by the National Federation of Community Development Credit Unions and Coopera, the designation is a national recognition of the work and commitment made to offer financial services to the Hispanic community. The designation also makes a public proclamation to the Hispanic community that the Juntos Avanzamos credit union welcomes the Hispanic community.
On the strategic roadmap for Community 1st is continuous employee training and cross-department education so every staff member is aware they can accept alternative forms of identification to serve more community members. In addition, the credit union will conduct more community outreach, pursue a community development financial institution (CDFI) designation and institute a series of financial education programs in the coming year.
To read how Community 1st has helped one very appreciative member achieve his American dream, download “Hispanic Member Growth Not Just for ‘Gateway States’ Anymore.”Leave a comment
Sometimes the best way to lead a successful strategy is to have survived an unsuccessful one. That is precisely the spirit with which Anne Hagen is approaching her credit union’s second go at Hispanic membership growth. The vice president of marketing for Iowa’s Community 1st Credit Union, Hagen believes one of the biggest lessons learned from the cooperative’s first attempt was that a single champion of the program is not enough.
“We identified how important it would be to serve the Hispanic community back in 2007,” said Hagen. “When we lost the key person leading that effort, however, the program fizzled out. After continuing to evaluate the segment and truly understanding how underserved it is, we knew we had to try again.”
President and CEO Greg Hanshaw explained that the calling to do more is rooted in the credit union’s 80-year history. “Our goal as an organization has always been to personify the credit union philosophy of people helping people. Although that can sound cliché, it’s the real deal around here. And it’s a huge part of why we felt years ago it was critically important to reach the Hispanic market.”
CU Recognizes Need for Grassroots Leadership
The credit union recognized a Hispanic member growth plan would need to be a cooperative-wide initiative supported by everyone from frontline staff to the C-suite. Yet, they also understood the importance of hiring an empathetic community member. This individual would help credit union staff better identify and overcome obstacles to engaging the Hispanic community. David Suarez joined the credit union as Bilingual Community Development Manager in June 2015. Suarez then helped recruit Edith Cabrera, the credit union’s first Hispanic board member.
“When David came to the credit union, he did not sit back,” said Hagen. “He immediately identified those areas where we weren’t doing enough for the community and started building initiatives from scratch. He spearheaded partnership with Coopera to help us learn best practices and with local Hispanic organizations to get us connected to the community in a grassroots way.”
According to Hagen, Suarez has a knack for explaining to community members how a credit union can help. “His message really resonates with the Hispanic people in the communities we serve.” The result has been close relationships with many credit union members, many of whom attribute their financial successes to his guidance.
That knack for explaining extends to Suarez’s influence inside the credit union. “One thing I’ve learned from David is a lot of the folks in Iowa have come from cultures and backgrounds where they didn’t trust the financial system that was built to provide those types of services,” said Hanshaw. “So we have an opportunity to show what a not-for-profit cooperative is and how it is uniquely built to provide services to people who may not meet the right criteria at a traditional financial institution.”
To read more about Community 1st all-in approach to Hispanic membership growth, download “Hispanic Member Growth Not Just for ‘Gateway States’ Anymore.”Leave a comment
Credit Union ‘Jump Starts’ Staff Passion for Hispanic Member Service with Immersion Exercises, Training
Buy-in from management was a critical first step to developing the Prime Financial Credit Union’s (PFCU) Hispanic member growth plan. And it did not come easily. After all, the credit union was still recovering from a conservatorship, and prudent board members wanted to be sure the plan would be strategic and well-executed.
“We saw this large population that really needed our products and services, and we wanted to do it right. Just throwing up a sign that said, “We speak Spanish,’ was not going to cut it,” said Colleen Jakubowski, PFCU’s chief operating officer.
To lay the groundwork for their strategic roadmap, the credit union began working with Coopera on a series of surveys to reveal the true needs of the Hispanic community in Milwaukee. Coopera also spoke with PFCU’s staff to uncover sentiments employees may not want to share with the credit union’s leadership.
“Coopera’s staff took us through an immersion exercise where we went to a local market for lunch,” said Jakubowski. “We were challenged to speak Spanish the entire time and to get to know people in the community. It was something of a cultural awakening for us. That activity really jump-started the passion. We learned a lot about a culture we didn’t know, and came away understanding that’s exactly what we can do for our members.”
PFCU Mobilizes Team of Volunteers
Training bilingual employees to not only speak the right words but also have the cultural awareness to adequately explain financial products was critically important, as well. In January 2016, PFCU mobilized a team of 13 volunteers who are now leading the execution of the credit union’s Hispanic growth plan. Divided into subgroups, such as marketing, Spanish language and compliance, the team is playing an instrumental role in the development and launch of PFCU’s new branch location.
PFCU has also developed a business curriculum for a class of Spanish speaking employees who want to expand their knowledge of the U.S. financial system vocabulary. According to PFCU Director of Organizational Development Amy Goratowski, these individuals are highly engaged and passionate about continually improving their skills.
Among the challenges Jakubowski and Goratowski cite is difficulty containing staff excitement about the prospect of gaining new members from the Hispanic community. “We can’t do it all,” said Goratowski. “We still have to be frugal, but the great thing about this community is word of mouth. Once they become aware of all we have to offer, it will be huge.”
To read more about PFCU’s Hispanic membership growth strategy, download “Hispanic Member Growth Not Just for ‘Gateway States’ Anymore.”Leave a comment
Something was changing in the community. The staff of Milwaukee’s Prime Financial Credit Union (PFCU) could feel it. More visitors to the 90-year-old cooperative were asking for Spanish translators and fewer came equipped with the basics of U.S. financial system awareness.
“It got to the point where it was a topic of conversation at every meeting,” said Colleen Jakubowski, PFCU’s chief operating officer. “We knew there was a Hispanic community here. But we didn’t know how large it was, nor how underserved many of the members of that community were.”
Her colleague, PFCU Director of Organizational Development Amy Goratowski, agreed: “Over the years, we had noticed less volume in our branches. It became clear we needed to devote a location to the Hispanic community – somewhere they would feel immediately welcome and comfortable. We’re excited to be breaking ground on that branch as we speak.”
Talk with Jakubowski and Goratowski and you can feel their excitement about the future of Hispanic membership growth at PFCU. The pair have a self-described justice mentality that has intrinsically motivated them to pursue improvements in the way the cooperative serves this influential and growing segment of Milwaukee – a city that saw its Hispanic numbers rise nearly 175 percent from 1990 to 2014. “We really get excited by the prospect of making things better for people,” said Jakubowski. “It’s what we like to do.”
Rich Experience Adapting Products and Services
Because the credit union serves a high percentage (70 percent) of members who reside in low-income neighborhoods, there is rich experience adapting products, training employees and making community connections already within PFCU. Jakubowski and Goratowski believe these competencies are helping them achieve early success in their Hispanic membership growth plan. “By serving segments that need special assistance or special products, we are actually getting back to our roots,” said Jakubowski. “Bigger financial institutions are about making money. That’s not us. We’re about reaching those people that need us most.”
Getting back to the credit union’s roots was an objective that came after a lot of soul searching. The only Wisconsin credit union to survive conservatorship, PFCU emerged ready to recommit to the right people. “We took a hard look at everything we were doing,” said Jakubowski, who noted the credit union is fully staffed at 55 with four active branches and a strong net worth. “What we discovered is we were doing a better job chasing people who maybe didn’t need us rather than serving those who did. These were the people we saw every day.”
Among the discoveries made during what Jakubowski calls the “enlightening period” was that many of the credit union’s most loyal members were not taking advantage of beneficial products, such as low-rate credit cards or fee-free checking accounts. As a result, leadership began to seek out grants and designations that could help them execute on their reignited mission to help community members become and stay financially healthy. They achieved a low-income designation from the NCUA, which has allowed them freedom to pursue new objectives, such as those inside the Hispanic membership growth plan.
Products Designed to Build Credit Histories
Many of the products and services already on the PFCU roadmap are ideal for the local Hispanic community, Coopera research has found. Payday loans, for example, are providing a much-need service as new regulatory requirements are expected to shutter some payday lending businesses. A responsible lender, the credit union will only allow one loan at a time, and each loan will be capped at $500. Because the credit union reports on these loans to the credit bureaus, members who take advantage of the product will be building credit histories, an important step to establishing financial wellness.
PFCU’s credit rebuilder account, too, is a great match for many unbanked people in Milwaukee. Members can open the account immediately with zero deposit down, and there is no minimum balance. A portion of the funds goes to pay off debts, which helps members increase their credit scores. The credit union also offers certificates for as low as $250 and other loans for as low as $500.
To learn more about the strategic evolution of PFCU’s Hispanic membership growth strategy, download “Hispanic Member Growth Not Just for ‘Gateway States’ Anymore.”Leave a comment
Entrepreneurialism and a solid work ethic are strong tenets of the Hispanic culture. Given these characteristics, it’s no surprise the number of Hispanic-owned businesses in the U.S. has expanded as rapidly as it has. Since 2007, these firms have grown an astounding 57 percent to more than 4 million.
Like most small businesspeople, Hispanic leaders need strong guidance, both financial and otherwise, to achieve and maintain success. The potential to increase business revenues is seen in the fact Hispanic-owned businesses have a tendency to generate average annual incomes well below the average in the U.S. (even below the average for minority-owned businesses).
Credit unions, particularly those focused on the growth of their Hispanic memberships, are well-positioned to provide this guidance. That’s because many of the cooperatives that are planning – maybe even executing – strategies to attract Hispanic consumers are already on track to serve the community’s business owners.
Hispanics account for one out of every five new entrepreneurs in the U.S. Entrepreneurs rely heavily on financial services. Yet, credit unions will do well to consider creating programs that go beyond business loans and other financial products to help business owners optimize operations and grow their firms. Consider solutions that reduce business expenses, such as payroll costs, for example. Offering the employees of Hispanic businesses payroll direct deposit to checking accounts or to prepaid reloadable cards will help the owner eliminate payroll check printing and will provide employees more access to their money. This type of a program can be mutually beneficial, as the business saves time and money while the credit union establishes potentially long-term relationships with its employees.
Like any new product or service offering, the development of Hispanic business solutions should start with research and data analytics. This will allow the credit union’s product development team to segment the market and provide truly valuable, highly customized services. Start with your existing Hispanic members. You may be surprised to learn how many are business owners who may also be willing to help the credit union better understand their needs.
As your research is underway, begin to build relationships with local organizations that already serve Hispanic entrepreneurs and small businesses, such as Hispanic chambers of commerce. Your credit union can work in conjunction with these organizations to provide a much-needed service, connect with the community and begin to build trust.
Once you have a better understanding of the make-up, needs and behaviors of the local Hispanic business community, come back to your own capabilities. Evaluate your existing business and consumer service offerings to see where they fall short or how they may be adapted to the Hispanic business owner. Evolving your products, rather than expecting Hispanic members to adapt to them, is critical for success with this market.
Javier Palomarez, president and CEO of the United States Hispanic Chamber of Commerce, says Hispanic businesses are first and foremost American businesses. “Every tax bill we pay, every job we create, every product we manufacture and every service we provide goes to benefit our nation’s economy,” he wrote. And those businesses will do so to the tune of $660 billion this year.Leave a comment
For many people – especially those of us working in the financial services industry – it can be difficult to understand why someone would not have a bank account (or if they do, why they would still use costly alternative financial services). Yet, legitimate and systemic reasons for a lack of traditional financial relationships offer a glimpse into the “why’s” behind our nation’s underserved communities.
At the recent 2014 CUNA Community Credit Union and Growth Conference, credit union leaders and I dug into the question “Why Are Consumers Unbanked” to uncover strategies that may help the movement better serve these individuals.
Below are just five of the “why’s” we discussed:
Misperceptions about money persist
Geography plays a role
Culture can be a driver
Past behavior predicts future
Language barriers are real
For credit unions, we discussed, there exists a great opportunity to provide a better alternative for these individuals. That’s because everyone has financial service needs – almost daily. Take a look at the five “why’s” above and ask yourself if your cooperative can address any or all of these for your local unbanked and underbanked community.Leave a comment
The U.S. Hispanic market’s sheer size, youth and rate of growth has many in the financial services market understanding now is the time to adjust for service to this critical consumer segment. Part of the draw to serving Hispanic consumers – particularly for credit unions who struggle with aging memberships – is the unmatched youth of the U.S. Hispanic market.
For this reason, targeting “second-generation,” or children of Hispanic immigrants, is a smart strategy for credit union leaders who want to introduce their cooperative to the next generation of financial-service consumers. Beyond this target market’s youth, second-generation Hispanics generally have higher incomes, more degrees and own more homes than their parents, making them attractive financial clients. In fact, 91 percent of Hispanic youth agreed with this statement: “No matter how poor you start out in the United States, with hard work you can achieve success.”
The possibilities for credit unions to act as a partner in the pursuit of this belief is equally as strong, as many young Hispanic members will have part-time jobs with income streams at younger ages. Couple this with a need for education, lifestyle and auto loans, and the value of a credit union to a young Hispanic American becomes clear. If established early, that relationship is likely to grow over time, as members enter adulthood, their careers grow and they begin to upgrade vehicles and purchase homes.
Communicating this ability and willingness to help young adults reach their financial goals will be less complicated with second-generation Hispanic consumers, as 93 percent report they speak English either very well or well. That said, this audience is typically bilingual, with 8 in 10 second-generation Hispanics reporting they converse either very or pretty well in Spanish.
Understanding which segment of the Hispanic youth population best aligns with a credit union’s value proposition and strategic growth goals is an important first step to the development of a plan to serve young Hispanics.
This blog is an excerpt from the new Coopera white paper, “The Multifaceted Hispanic Market,” available for download at http://tinyurl.com/c8jwf45.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.
With 80 percent of its members identifying themselves as Hispanic, First Imperial Credit Union (FICU) of El Centro, Calif., knows the importance of catering its products and services to serve the specific needs of this influential community.
Headquartered in close proximity to the U.S.-Mexico border, El Centro is situated in the Imperial Valley, one of southern California’s larger agricultural communities, attracting field workers and laborers from Mexico. Because of the seasonal nature of Imperial Valley work, the region suffers a 28-percent unemployment rate and a history of financial instability. Financial institutions (FIs) tied to the long-standing practice of lending money based solely on credit scores have had trouble realizing the growth potential and revenue opportunities that can come from properly serving the Hispanic market.
When now President and CEO Fidel Gonzalez joined FICU in 2009, he understood to successfully serve the local Hispanic population the credit union would need to change its lending philosophy. “Most Hispanics are in need of financial services, and they are frequently turned away from other FIs because of their credit scores and employment history,” said Gonzalez. “They need FIs who are willing to take a chance on them. So, FICU adopted a new lending structure allowing our credit union to place more emphasis on a member’s ability to pay moving forward, rather than on past delinquency.”
To do this, Gonzalez worked closely with his staff and industry. First, the team altered the credit union’s practice of using a member’s credit score as an approval mechanism. Rather, Gonzalez encouraged his team to focus on the member’s employment status, working to approve loans for members with 12 months of work history and able to maintain their existing trade lines. The staff also reviewed an applicant member’s credit history to better understand other financial obligations and the types of loan applicant members could afford. Under the new lending structure, a member’s credit score became a pricing tool in the loan application process, rather than a deciding factor.
According to Gonzalez, FICU today works with members to book a series of small loans, starting with $500 and working up to larger loans as credit improves. “We want members to be successful. So together we set realistic goals, loaning to them based on what they can afford,” said Gonzalez. “We impose credit limits to offset the risk, and we educate our loan recipients on the importance of paying — if they pay us, we’ll lend to them again. That’s a powerful motivator for our Hispanic members.”
To supplement its loan-builder program, Gonzalez also instituted the Opportunity Checking program at FICU. The program is designed for any member who has been denied a checking account in the past because of account mismanagement or a Chex Systems record. The goal of the program is to re-establish members into normal financial services and encourage them to stop using check-cashing establishments that charge high fees for access to cash.
Members open an Opportunity Checking account for $50 and are charged a $10 monthly maintenance fee to receive many of the advantages of a traditional checking account, including an ATM or debit card. The cards carry lower limits, but there is no minimum balance required and the accounts offer free home banking and bill pay. After 12 months, the Opportunity Checking account converts to a regular checking account that includes overdraft privilege, regular ATM and point-of-sale (POS) limits and other perks.
“The feedback from our members has been extremely positive,” said Gonzalez. “Because many of our members get paid weekly, the monthly fee is small compared to the 3- to 5-percent check-cashing establishments typically charge. This program is a win-win — Hispanics are gaining access to the financial services they desperately need at prices they can afford and with terms they can meet, and the credit union is able to capture lending activity that would have been lost had we not created a relationship.”
In the 18 months since Gonzalez and his team implemented these new programs, FICU opened 330 Opportunity Checking accounts and realized nearly $40,000 in fee income. The credit union also booked more than $1 million in loans and increased total net membership by 1,958 members, a 17-percent increase in a year and a half.
For FICU, Gonzalez concluded that “Making a Difference, One Member at a Time” isn’t just a clever marketing slogan. Rather, it’s a true reflection of the credit union’s commitment to innovation – stepping up to provide fair, dignified and affordable services to a deserving group of influential members.Leave a comment
Please join us in voting for Warren Morrow, founder and late CEO of Coopera, to be the recipient of Credit Union Magazine’s 2013 “CU Hero of the Year” award. The four nominees for this year’s award exemplify the credit union philosophy of “people helping people” and have truly gone the extra mile to extend credit union service in their communities.
Mr. Morrow founded Coopera with the belief that Hispanics need credit unions as much as credit unions need Hispanics. He believed deeply in helping underserved Hispanics receive dignified financial services. By bringing financial stability to a home, Mr. Morrow believed, you could begin to address other social issues. Sadly, Mr. Morrow passed away in February, 2012.
To learn more about Mr. Morrow, read A Man of Integrity, written by Mark Condon, CUNA’s Senior Vice President, Business and Consumer Publishing, as well as Credit Union Magazine’s recent article on Mr. Morrow “Latino CU Visionary Leaves Legacy.”
Help us honor Mr. Morrow as “CU Hero of the Year,” CLICK HERE TO VOTE TODAY! No login needed. Voting is open until May 17.
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By Guest Blogger and Interim Coopera CEO Murray Williams
Coopera celebrated its five-year anniversary last week. Not an insignificant milestone – and one we would normally toast with gusto. But the day took on a more reflective and bittersweet tone, as we remembered Coopera’s founder and our friend, Warren Morrow, who unexpectedly passed away on Feb. 15.
Warren was not only Coopera’s CEO, he was my good friend and close colleague for more than six years. We shared a lot of special milestones together – both professionally and personally. So yesterday was emotional for me, Miriam, Anna and the rest of the team, knowing this time we’d be toasting with Warren from afar.
We all carry a piece of Warren’s spirit with us. I am unequivocally better for knowing him and proud to have a small role in moving his vast legacy forward. There’s never been a more critical time to champion Coopera’s work of “doing well by doing good.”
Miriam and I recently participated in CUNA’s Government Affairs Conference and came back energized about the future. From CUNA’s Hispanic Outreach Committee efforts, to the programs of the Network of Latino Credit Union Professionals (NLCUP), to the countless credit union leaders who are making Hispanic outreach a strategic priority, the thought leadership in our movement is astounding. We’ve never felt more momentum or urgency in our collective cause.
In fact, it was Warren’s cause, as well as his vision and his collaborative spirit that has largely brought our industry to where it is today – to bring dignified financial services to the underserved Hispanic community.
The future is incredibly bright. The need is great. Credit unions are uniquely positioned to meet that need. And Coopera will be there to help lead the charge – now and for years into the future.
Warren would be proud.
Happy Anniversary, mi amigo.
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