The following case study is an excerpt from Coopera’s Iowa Hispanic Opportunity Report for the Iowa Credit Union League (ICUL). For more information, contact the ICUL at www.iowacreditunions.com.
Veridian Credit Union, headquartered in Waterloo, Ia., has a long history of offering innovative and affordable financial services to members. One way Veridian differentiates its business from other financial service providers in the area is by offering services specifically designed to improve the socio-economic well-being of those in greatest need — including the local Hispanic community. For Veridian it’s not about the business’s bottom line; it’s about best serving members’ financial needs.
“Many years ago, Veridian recognized a need to offer Latinos in our communities more affordable products and services compared to the expensive alternatives they were using,” said Angela Weekley, Veridian community inclusion manager. “We also understood that our credit union’s value to members was to help them build a successful financial future, rather than offering one-off solutions.”
To aid their efforts, Veridian began working with Coopera to better understand the nuances of the Hispanic culture, to learn more about what this market needed out of a financial services provider and to build a relationship with the Hispanic communities in its operations areas. Coopera also gave Veridian guidance in hiring bilingual staff, as well as marketing and tailoring its product and services mix to this very important demographic.
According to Shelly McGill, Veridian’s Central Iowa regional manager, offering the right products and services was very important to meeting Latino members’ unique financial needs. One of the actions Veridian took was to give members a viable alternative to expensive payday-loan centers and check-cashing services. To do this, Veridian introduced an affordable alternative to traditional payday lending outlets in early 2007. “The Payday Lending Alternative (PAL) loan features a savings component to help break the cycle of dependency on payday loans,” said McGill. “This program was a success almost immediately. Just two years after it was introduced, Veridian had already awarded more than 4,700 PAL loans to both Latino and non-Latino members.”
Veridian also started offering the Coopera Card, a prepaid card tailor-made for the Hispanic market. Quinceañera loans, checking and savings accounts, CDs (Certificates of Deposit) and credit card accounts, as well as home equity loans, round out the services of which Veridian’s Hispanic members take advantage.
In addition to those products, Veridian made an effort to enhance its member services. They became an ITIN (Individual Taxpayer Identification Number) acceptance agent to help community members apply for their ITIN number through the IRS, and also began to offer interest-bearing safe savings accounts and loans to Hispanic members without traditional forms of identification and documentation. Veridian’s ITIN loan offerings include credit builder loans, auto loans and consumer loans such as the PAL, share secured co-signer loans. The company also focused on offering financial education opportunities, like a credit builder loan program, to help immigrant families better acclimate to the U.S. financial system. Prior to hiring additional Spanish-speaking staff, the credit union incorporated an AT&T Language Line better-equip English-speaking staff to assist Spanish-speaking members.
To support these products and services, Veridian also began to enhance its internal infrastructure for Hispanic outreach. “We make a point to hire bilingual staff in our branches when the opportunity makes sense, even adding more staff in those locations with greater non-English speaking populations,” said Weekley, who noted the credit union currently employs 23 Spanish-speaking staff in its 26 branch locations. “We implemented a diversity training program for all employees to make sure everyone is on board with the company’s goals and efforts.”
Weekley added that Veridian started their outreach to the Hispanic community by forming an advisory council made up of staff and local community members. It helped the credit union better understand the Hispanic community’s needs and make recommendations on how Veridian could best meet those needs.
Veridian continues to focus its external marketing efforts on better targeting Latinos. “We create bilingual brochures and collateral for our products and services,” said Weekley. “And, we advertise in Spanish newspapers and on local radio stations. We make sure to participate in public relations opportunities, like providing information or quotes for articles in newspapers and magazines, to build awareness about Veridian and its outreach efforts.”
“We asked the council to review our initiatives to make sure they make sense for our Latino members,” said Weekley. “Advisory Council members reviewed materials to make sure our translations accurately reflect the messages we wanted to communicate.”
In addition to its marketing initiatives, Veridian’s external outreach efforts include becoming an active participant in the local communities the credit union serves. Every year, staff participate in local Latino Heritage Festival and Cinco de Mayo celebrations, as well as partner with organizations like J&E Entertainment in Iowa City, Ia., to host an annual Sunset Salsa event. And, each July, Veridian is the presenting sponsor for Festival Latino de Cedar Rapids in Cedar Rapids, Ia.
The cooperative is also active in community organizations. For example, McGill serves on the Latino Forum of the Urban Core, a Des Moines based group of members and supporters of the Latino community. “We really care about the people in our communities,” added Weekley, “and we are proud that our actions and intentions are authentic. The best way to prove this to our members is by truly becoming a part of their lives.”
All of these efforts have been successful thanks to the credit union’s hard work and dedication to this mission of improving its members’ lives. To continue its success, McGill noted that Veridian keeps up-to-date on the latest rules and regulations in the financial industry, makes sure the cooperative is offering products and services that not only make sense for members but that also comply with the law .
“Because we are a cooperative, rather than a for-profit business,” said McGill, “we can focus on doing what’s right for our members. Our results prove this is the right approach. In 2012, we experienced a 10-percent growth in our Latino membership.” Currently, 6,398 of the credit union’s 174,000 members are Latino.
Weekley concluded, “We truly listen to the voice of the people — not just guess which products and services Hispanic members need. We ask them for input and then deliver what they want. We are proud of what we’ve accomplished so far and will continue to look for ways to grow our efforts and opportunities in the future.”Leave a comment
The Hispanic market in the U.S. continues to grow and change at a rapid pace, which will present significant opportunities (and challenges) in 2014. One of the most important ways to prepare right now to better serve Hispanic members in the coming year is to conduct an audit of your bilingual marketing materials and signage.
One of the most common misconceptions about the Hispanic culture is that Hispanics speak different forms of Spanish. Although there are different colloquialisms or words, phrases or statements that are unique to a certain culture or region, there are not completely different forms of the language — the basic language structure of Spanish is shared. Because there are cultural nuances in the Spanish language, it is important for your credit union to make sure that your translations are accurately conveying your messages. The best way to accomplish this is by performing what are called “back translations.”
What is a back translation? It is a second translation of text back to the original language (in most cases, English) to ensure developers understand the final meaning of their translation.
When the source language is English, there is often discrepancy in the meaning between the original source and the back translation. Spanish, for example, has a notably different vocabulary, and many words that are used in English simply don’t exist. Back translations should be performed to ensure that the language is a correct translation of the original, in which, the meaning was not changed, but also the readability of the text has not been affected through the translation process. The process should include conducting at least two back translations and working with the original translation to accommodate the findings of the back translation.
Here’s an example: When you translate the English phrase “all the rage” to Spanish, you do not want to convey the literal meaning but rather the cultural meaning of that phrase. The Spanish translation of this phrase could be “lo ultimo.” A back translation of “lo ultimo” would tell you that you are translating “all the rage” to a similar phrase that will be understood in Spanish that means “the latest.”
The important thing to remember when doing back translations is that the person doing the back translation should be familiar with the original version in English to avoid inadvertently changing meanings of the content. For credit unions, here are some examples of common phrases you’d likely have translated and the corresponding back translations:
English source: Limit our sharing
English source: Build Credit
To prove how easy it can be to incorrectly back translate certain phrases, here are some examples of back translations gone wrong:
English source: Batch (transactions)
English source: Arrangement between two parties
Although they may seem to be a time-consuming and expensive task, back translations are a critically important part of your credit union’s validation and cultural adaptation to specific Hispanic markets. Doing back translations can help to avoid errors, as well as better understand what the credit union has had trans-created. For instance, many credit union compliance or legal departments request back translations to double check that approved messages are what is truly being distributed to members.
By becoming more familiar with the language nuances of your credit union’s local Hispanic population, you will be better positioned to provide for these members’ needs. For credit unions willing to invest the time and resources, the benefits of a bilingual marketing audit will greatly outweigh the perceived costs.
To best understand the make-up of the local population Coopera can help with a comprehensive market analysis. Rest assured, however, the basics of the Spanish language will be understood by your Hispanic members.
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More than one in four households (28.3 percent) in the U.S. today is underserved, conducting all or some of their financial transactions outside of the mainstream banking system. Hispanics represent a disproportionate number of this group — in fact, there are nearly 7 million Hispanic households in the U.S. that are underserved. This means that about one out of every two U.S. Hispanics falls into this classification.*
Because of the U.S. Hispanic market’s sheer size, youth and rate of growth, it represents a large market opportunity for credit unions. Creating products and services to specifically meet the needs of underserved Hispanic consumers can give your credit union a significant competitive advantage in 2014.
When it comes to attracting Hispanic consumers — underserved or not — one-size-fits-all financial products and services don’t work. As your member base continues to diversify, it is unrealistic for you to expect the Hispanic community to conform to your products and services — it’s got to be the other way around. Therefore, if your credit union is looking to attract more Hispanic members in 2014, you need to plan now to provide fair, dignified and tailored financial services.
Fortunately, there are many products offered by credit unions across the country that have been created with the Hispanic consumer in mind and are a good fit for the Hispanic market. The products include culturally relevant savings programs, prepaid reloadable card; auto, micro and lifestyle loans (for quinceañeras, weddings, immigration, citizenship, travel, etc.) and financial education. If you don’t already have these products in your portfolio, now is the time to add them.
And, even more products are on the horizon. the Filene Research Institute, is currently testing four products to benefit underserved consumers, including Hispanics, in its new financial services incubator.
Here’s a quick synopsis of these products:
-Non-prime Auto Lending from the National Credit Union Foundation. This program helps lenders fairly price and manage non-prime auto loans, incorporating the Lower Interest For Timeliness (LIFT) idea introduced by Filene’s i3 innovation team. LIFT is a loan feature that reduces interest rates when members make on-time payments.
-Borrow and Save from the National Federation of Community Development Credit Unions. This product increases consumers’ economic security by providing an affordable small-dollar loan with a payment term that makes sense for them. A built-in savings component also helps consumers self-fund their emergencies instead of borrowing money to handle them.
-Pay Yourself Back from Innovations in Poverty Action. As an add-on to any loan type, this product seamlessly converts borrowers into savers. Leveraging the habits formed by regularly making loan payments, it encourages consumers to keep making regular payments (or a portion of them) to themselves after the loan is paid off.
-Employer Sponsored Income, Advance Loan from North Country Federal Credit Union. This small-dollar loan program is offered to employees of select employer groups (SEGs) partnered with credit unions. Loan payments are auto-deducted from direct-deposited paychecks. Once the loan is paid, employees may continue making payments into savings accounts.
At Coopera, we see a lot of potential in these products for Hispanic consumers. We have found that many Hispanic consumers aren’t aware of what financial services are accessible to them, as well as struggle with basic financial education around money management and building/maintaining credit. These new products from Filene could help address these gaps and guide underserved Hispanics on a path to achieve their financial goals. We will keep you posted on how the testing phase of these products goes, as well as the potential for implementing them into your current product mix.
*For more information about the demographics of Hispanic consumers, download the Coopera white paper “The Multifaceted Hispanic Market” at http://tinyurl.com/c8jwf45.Leave a comment
Thanks in part to the Hispanic market’s disproportionate number of underserved consumers, competitors from all corners of the financial services industry have targeted Hispanics with renewed vigor in recent years. These include money service businesses such as check cashers, money transfer providers and money order issuers. Small-dollar loan providers, rent-to-own shops and high-interest auto financing providers are also finding a customer goldmine within local Hispanic communities.
Much of this is due to the Hispanic culture’s reliance on advice from friends and family. When one organization serves a Hispanic customer well, chances are that business will grow quickly from referrals. As well, entirely new providers have come on the scene, making competition for the critical Hispanic market even tougher.
While tax providers offering refund anticipation loans are nothing new, they are now offering loans in the form of prepaid cards, giving underserved Hispanic consumers access to the safety and convenience of plastic. The popularity of prepaid cards with underserved consumers has sparked tremendous growth in the prepaid sector with Walmart leading the pack and Hispanic focused companies like Telemundo and Univision also getting in on the game.
Because 91 percent of those identified as underbanked have mobile phones and 57 percent have smartphones, mobile services for this group are also springing up rapidly. One example is m-Via’s Boom service, a P2P mobile payments service targeted to the underbanked.
Fortunately, credit unions have several innate qualities that help them compete against long-time and new-comer financial services providers. The ability to offer the same products and
Where you start depends, of course, on the special opportunities unique to the immigrants in your local communities. By performing a comprehensive market analysis, credit unions can better define their target market, understand the competitive factors that will shape their own strategies and begin to see how service to immigrant populations can align with their overall growth strategies.
This blog is an excerpt from the guest opinion article “Immigration Reform May Prompt Member Push” recently published by the Credit Union Times.Leave a comment
Last month, the U.S. Senate introduced an immigration reform bill that proposed a complete overhaul to the country’s immigration system. Although a vote is likely several months away, credit union leaders would do well to begin paying attention now as passage of immigration reform will undoubtedly impact them.
If instituted, the proposed path to citizenship included in the bill will bring about an increased need for assistance to an estimated 11 million undocumented immigrants in the country today. With identification and documentation barriers removed, these aspiring U.S. citizens will begin the search for trusted providers of everything from English as a second language courses to home sales.
Of the estimated 11 million undocumented immigrants in the country today, many are Hispanic. According to the Pew Hispanic Center, nearly 60% are of Mexican origin, making outreach to this particular group very important for credit unions bracing for the impact of immigration reform. Beyond its sheer size, the Hispanic market’s youth has made service to this group a sound investment for credit unions looking to grow while lowering the average age of membership.
Credit unions that have been serving immigrants well and building trust in the communities they serve, will have a definite leg up when these new business opportunities come to fruition. That said, it’s not too late to begin following in these progressive credit unions’ footsteps. And for some credit unions, particularly those in gateway states, it’s not only a good idea. It’s critical for leadership to begin formulating an outreach strategy today — one that will put them in touch with these potential new members now.
The introduction of immigration reform bills by our legislators shines a bright light on what some credit unions have already learned: Investing in service to the critical Hispanic market is vital to future growth.
This blog is an excerpt from the guest opinion article “Immigration Reform May Prompt Member Push” recently published by the Credit Union Times.Leave a comment
Did you know that between 2002 and 2007, the number of Hispanic-owned firms grew by nearly 50 percent? Today, Hispanics own 2.3 million businesses, or 8 percent, of all U.S. non farm businesses. What kind of a financial opportunity does this represent for your credit union? A large one.
In certain states, the opportunity is particularly clear — for instance, 8 percent of all Nevada businesses are Hispanic-owned. In California, that stat jumps to 17 percent. The states with the highest growth rates for the Hispanic community are in the Southeast, Midwest and Mid-Atlantic regions. As entrepreneurialism and a strong work ethic are strong tenets of the Hispanic culture, it stands to reason these regions are about to see an explosion in the number of Hispanic-owned businesses.
Like most small businesspeople, Hispanic leaders need strong guidance, both financial and otherwise, to achieve and maintain success. And credit unions in particular, with a focus on the “people helping people” philosophy, understand serving this disproportionately underserved community is not only an investment in the sustainability of their cooperatives; it’s a way to continue supporting their collective mission.
The potential to increase business revenues can be seen in the simple fact that 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). Lower-than-average income from these businesses may be due to the challenges Hispanic Americans face when it comes to founding and maintaining a successful business, namely limited capital and access to credit. And, often Hispanic business owners are on their own, without the benefit of boards of directors, shareholders or even executive teams. This underscores the importance of leadership support and guidance for this critical segment of the Hispanic population.
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
Financial literacy is one of the most critical services that your credit union can provide members, particularly the Hispanic community in your area. Many Hispanics in the U.S. today are underserved, turning to friends and family for loans, or worse to expensive check-cashing or payday loan establishments.
With one out of two U.S. Hispanics being unbanked or underserved, your credit union has a tremendous opportunity to make a real difference in the lives of Hispanic members.
Coopera client Security One Federal Credit Union in Arlington, Texas, believes financial literacy efforts need to focus on the whole family’s financial needs. This begins by teaching children about saving and the advantages of holding a youth account and goes all the way through to helping parents understand how to improve credit scores or secure loans. Also, Security One works to educate business owners on the importance of budgeting expenses, filing taxes and preparing for audits.
Business Development Coordinator Danny Garcia said, “At Security One, we are focused on growing the Hispanic community’s ability to be more financially independent. Through our assistance and guidance, individuals are able to better themselves financially, which makes the whole community stronger. We take a holistic approach, networking and partnering with schools and universities, churches, as well as community organizations, like libraries, medical centers and government agencies, to promote financial literacy and the credit union difference.”
Some of the events Garcia and the team at Security One have participated in include:
Garcia and the Security One team is also working closely with local groups to host an upcoming 4-day mobile event to help Hispanics secure the identification documents they need
As with any new program, it’s important not to recreate the wheel when developing financial literacy initiatives. To get started, you can utilize resources and opportunities available through community partnerships, Coopera and other industry partners to supplement your programs. As Garcia and Security One have proved, networking and community involvement are vital in a credit union’s outreach efforts.
Other resources readily available to your credit union include:
El Poder es Tuyo Updates
Hispanic Outreach Webinars
International Credit Union Leadership Program
The program is designed to facilitate idea exchanges, promote foreign language development, enhance cultural diversity and improve problem-solving skills as they relate to global credit union development and management. The program also focuses on helping credit unions find new ways to attract young members.
– Apr. 7-May 11, 2013: Costa Rican participants intern in Alabama, Florida, Oregon or Washington
Sometimes referred to as the “Mexican St. Patrick’s Day,” Cinco de Mayo (held each year on May 5th) is one of the most misunderstood holidays we celebrate in the U.S., even by people of Mexican heritage.
Despite its reputation, Cinco de Mayo does not mark Mexico’s Independence Day. That is celebrated on September 16, the day in 1810 when Father Miguel Hidalgo took to his pulpit in Dolores, Querétaro, and urged his congregation to join him in efforts to overthrow the Spanish tyranny in Mexico. The celebration is also known in Mexico as El Grito de Dolores or “Cry of Dolores.”
Cinco de Mayo is actually a regional holiday in Mexico, called El Día de la Batalla de Puebla, celebrating Mexico’s victory over the French on May 5, 1862, during the Battle of Puebla in the American Civil War. Although Cinco de Mayo is a big holiday in Puebla, it is actually celebrated more in the U.S. than it is in most of Mexico. In the U.S., Cinco de Mayo is celebrated with parades and festivals that offer plenty of traditional Mexican food, cold beverages and music for participants. The holiday has really become more about celebrating the Mexican way of life than about remembering a battle that happened 150 years ago in Mexico.
Just as there is a misconception about Cinco de Mayo, there are also common misconceptions about Hispanics and the Hispanic culture of which credit unions looking to better serve this market should be aware. These include:
– All Hispanics are Mexican. “Hispanic” is a U.S. Census term often used to refer to people of Latin American and Spanish origin regardless of race. U.S. Hispanics have roots in 21
– All Hispanics are Catholic. About 62 percent of Hispanics are Catholic, but there is a growing conversion rate from Catholicism to other religions. In fact, the Mormon church recently reported the number of Spanish-speaking Church of Jesus Christ of Latter-day Saints congregations in the U.S. rose from 389 in 2000 to more than 760 at present. According to a Pew Hispanic survey, 83 percent of Hispanics claim a religious affiliation, and one in five (19 percent) say they are Protestant. Fourteen percent of Hispanics say that although they are religious, they are unaffiliated with a particular religion.
–Hispanics speak several different forms of Spanish. While not all Hispanics speak Spanish, Spanish is the overarching language for many Latin American countries. According to Pew Research, more than 80 percent of Hispanic adults say they speak Spanish. Even though there are cultural nuances in the Spanish language, there are not completely different forms of the language in Latin American countries — the basic language structure of Spanish is shared.
That said, there may be different colloquialisms or words, phrases or statements, unique to a certain culture or region. To best serve your local Hispanic community, it is important to learn the make-up of the local population. Coopera can help with a comprehensive market analysis.
Rest assured, however, the basics of the Spanish language will be understood by your Hispanic members regardless of the Latin American country from which they hail.
–All Hispanics are poor immigrants. Not all Hispanics are immigrants (foreign nationals born outside of the U.S.), and the U.S. Census Bureau reported that there were over 2.1 million Hispanics in the U.S. with personal income over $65,000 in 2011. Today, the U.S. Hispanic population is made up of multiple generations of people from different countries of origin, from different income levels and different life experiences. Each Hispanic in the U.S. today can claim his/her own characteristics, beliefs and behaviors.
The Hispanic market in the U.S. is rapidly growing and changing, which presents important opportunities for credit unions that invest the time and resources in preparation for further expansion. One way to learn more, and to prepare your staff, is by investing in a resource like CUNA’s training-on-demand resource Hispanic Immigration Course. By becoming more familiar with the nuances of the Hispanic population, credit unions will be better positioned to provide for these members’ needs.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.
Please help us spread the word by sharing the message through your personal network and social media connections. Thank you!Leave a comment
Commissioned by the California and Nevada Credit Union Leagues, a new report from Coopera highlights opportunities for credit unions in California and Nevada to grow their membership and increase their revenue through service to local Hispanic populations.
Coopera’s Hispanic Opportunity Report will be available to California and Nevada Credit Union League Applied Research Institute members first, and then it will be available to the general public following these webinars:
As the influence and impact of Hispanic consumers continues to grow in the U.S., the Coopera Hispanic Opportunity Report discusses what serving Hispanics means for California and Nevada; which credit unions are best positioned to serve the Hispanic community; and characteristics of the local communities that must be considered to successfully serve Hispanic residents.
According to the report, local credit unions’ biggest growth opportunity right now is Hispanics.
In California, the report uncovers:
For the report, the Coopera team calculated if 10 percent of California’s Hispanic adults were members of a credit union, they would contribute an estimated $2.1 billion in loan balances and $592 million to annual income.
In Nevada, the report reveals:
A similar calculation done for Nevada, based on an assumption of 10 percent of the Hispanic community joining a credit union, found Nevada’s Hispanic adults would contribute an estimated $82 million in loan balances and $28 million to annual income.
The Hispanic Opportunity Report also debunks common myths businesses have about the Hispanic community and shares case studies of credit unions with successful Hispanic outreach efforts, including:
For more information about this report, contact Coopera at: http://www.cooperaconsulting.com/contact-us.cfmLeave a comment