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  • Keeping Lending Products Accessible for Hispanic Borrowers

    Posted by on August 7, 2017

    By making a few key adjustments to your traditional lending products, you can make inroads with an entire segment of Hispanic borrowers looking for your services.

    It’s no surprise that the Hispanic segment of the U.S. population is growing, increasing from 17 percent of the population in 2015 to an expected 29 percent in 2020 (according to U.S. Census figures). With that increase comes a growing demand for culturally-appropriate lending services, which is an exciting opportunity for credit unions looking to grow Hispanic memberships.

    Access to credit is a key stepping stone for many Hispanic families, opening the door to greater financial and economic stability. Small-dollar loans also are a necessity for many Hispanic individuals, particularly those looking for financial help in completing the immigration and naturalization process. Without assistance, the application and processing fees associated with filing for U.S. permanent residency or U.S. citizenship can be out of reach for many immigrants.

    By keeping a few key factors in mind when designing lending products, credit unions can expand the reach of their offerings to connect with Hispanic members and create lasting relationships.

    Affordable products

    Product affordability is key for many Hispanic members. Keeping application fees low (or non-existent) and capping interest rates to keep monthly payments affordable will make lending products more appealing to multiple segments within the larger Hispanic community.

    Redefine creditworthiness

    Hispanic immigrants and other non-U.S. citizens may not always fit the traditional “borrower” profile. Yet, members of this segment can become loyal, profitable members. Instead of turning to traditional tools like a FICO score, consider looking at things like rent or telephone payment histories. Available through services like LexisNexis or Clarity, these alternative credit indicators can provide your lending team a view of a potential borrower’s ability to meet financial obligations.

    Cultural competence

    Some Hispanic segments prefer to speak in their native language when discussing complex and personal things like finances. Having bilingual staff and materials is key to helping your Hispanic members, particularly those new to the cooperative, understand the associated fees and requirements for lending products, and to feel more confident in their financial decisions.

    By adjusting a few elements of your traditional lending process and products, you can better connect with Hispanic borrowers and create mutually beneficial and long-term relationships that drive growth. If you’d like more information on how Coopera’s staff can help you do that, please let us know.

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    Gomez: This Is Our Time to Take Action

    Posted by on March 2, 2015

    Federation colleagues and I have been overwhelmed by the terrific response to the financial inclusion campaign, which kicked off in January at the Financial Inclusion for Immigrant Consumers Roundtable held in Los Angeles.

    Ivonet Gomez, marketing manager for USC Credit Union in Los Angeles, was one of more than 50 professionals who attended the event. Following the roundtable, she shared this insight with Coopera:

    Ivonet Gomez, USC Credit Union Marketing Manager

    I thought the roundtable was very well executed and perfectly timed given the government’s new immigration reform. The information provided by all presenters was insightful and helpful.

    I really enjoyed Senator Cedillo’s testimonial and appreciate our city council’s involvement and support of this initiative. I have heard about the Deferred Action for Childhood Arrivals (DACA) and Deferred Action for Parents of Americans and Lawful Permanent Residents (DAPA) programs before, but I was not aware of the details and upcoming expansion guidelines for these programs before the roundtable presentation. Also it was insightful to learn the Mexican Matricula Consular is now accepted as a valid form of identification at the DMV and other financial institutions. The Mexican Consulate is offering all credit unions a great opportunity to participate and get involve firsthand with those that need our help the most.

    The next steps for our credit union are to plan a Hispanic growth strategy, create new products/services that promote financial inclusion to immigrants through DACA/DAPA, and promote loans with a credit history building purpose and savings component.

    We understand the importance of all credit unions getting involved in this particular moment, when it is key to serve our immigrant community. We will continue to participate and be one of the credit unions that drives, collaborates and implements these initiatives to better serve the underserved communities in Los Angeles. This is our time to take action.

    We couldn’t agree more with Ms. Gomez’s remarks; this is indeed the time for credit unions to show how they differ from other financial institutions and to extend a hand to a population that needs credit unions as much as credit unions need them.

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    Unprecedented Interest: Credit Unions More Curious than Ever about Immigrant Opportunity

    Posted by on February 16, 2015

    In all the years I’ve been blessed to be a part of the credit union industry, I have never seen the level of interest in serving immigrant and underserved communities as high as we’re seeing right now. It’s extremely rewarding and very encouraging to see the movement grab hold of this significant opportunity.

    Most recently, we witnessed this growing curiosity among credit union leaders through our financial inclusion campaign with the Federation. Just two webinars and a roundtable event have already brought together close to 250 people excited to discuss how to provide financial inclusion to immigrants impacted by the president’s recent immigration executive order.

    I can’t wait to see how many immigrants are brought into the financial mainstream and how many more credit union leaders we are able to reach as this campaign continues.

    As reported by CU Today, it was apparent during the roundtable event that credit unions leaders’ comfort level with offering products and services to the immigrant population is rising.

    “Energy and enthusiasm levels remained high into the afternoon with presentations from Catholic Charities of Los Angeles and California, the Coalition for Humane Immigrant Rights of Los Angeles (CHIRLA) and the National Council of La Raza (NCLR) on how to leverage partnerships,” reads a recap blog post by the Federation.

    Credit unions from the local area, Phoenix and Washington, D.C. participated in the Los Angeles roundtable event. However, as evidence by the webinar attendance, this is an issue of interest to credit unions in all parts of the U.S. Professionals from across the country participated in those two online events.

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    Video: Targeting the Hispanic Consumer for Growth

    Posted by on May 8, 2012

    I recently appeared on an episode of the CU Broadcast to discuss the Hispanic market opportunity for credit unions. The host, Mike Lawson, and I talked through quite a few topics, most notably how credit unions can earn the trust of young, unbanked Hispanics.

    The video is also archived at CUBroadcast.com, along with many other insightful episodes of the show. If you get a free minutes, visit the site and watch a few…

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    Building the Foundation First

    Posted by on May 1, 2012

    By Guest Blogger Michael Adams, Vice President of Marketing and Public Relations at Greater Iowa Credit Union

    In working with Coopera, we have found it important to get the structural components in place before launching any significant outreach to the Hispanic community. This includes things like laying a solid foundation complete with Hispanic-friendly membership policies, as well as securing employee, leadership and board support. Only after this can you begin to do the fun stuff, like product development or marketing.

    Not everyone on a credit union’s leadership team or board of directors may be fully supportive of an Hispanic outreach program, and some products, such as ITIN loans, for example, may be downright scary to them. A vocal board member who is not on board can create barriers to any proposal. We discovered early on that some credit union administrators and board members can have a knee-jerk reaction to the creation of an aggressive Hispanic initiative.

    More often than not, education regarding the needs of this community is necessary. Once you do get a good customer identification program in place and board support, you can begin the rewarding work of reaching out to the Hispanic community with products and services that are useful to them, such as remittance services, free checking, reloadable debit cards, ITIN and other culturally relevant loans.

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    Worth Fighting For

    Posted by on April 17, 2012

    By Guest Blogger Oscar Porras, Community Liaison at Maps Credit Union

    Outreach to the Hispanic community in the U.S. will be an essential part of any credit union’s future success.

    The 2010 U.S. Census showed that the Hispanic population increased 43 percent since 2000. In our neck of the words (Oregon), we’ve seen a whopping 63.5 percent increase over the same period of time. An essential part of reaching out to our Hispanic neighbors is presenting products and services in a way that is culturally relevant.

    At Maps Credit Union, in cooperation with Coopera, we are working to add some of the services that are most important to the Hispanic community, such as credit builder loans, remittance services and prepaid reloadable cards. We have set up inter-departmental teams to discuss these products, and we look forward to rolling out our first new product in the first quarter of 2012.

    It has not been easy. There have been some challenges, including negative attitudes from a small number of staff. Then again, anything worth fighting for always brings challenges. We are working to address our internal and external issues through open and honest communication. Racism, stereotypes, and the like all come from misinformation. Educating staff about their new neighbors will help foster a credit union culture of acceptance and understanding.

    I look forward to my new role as Community Liaison at Maps Credit Union and adding another wonderful piece to our credit union culture. I would love to hear about your challenges and victories as your institutions move toward a greater focus on welcoming the members of your local Hispanic communities.

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    It’s Never Too Early To Start

    Posted by on April 10, 2012

    There’s no better time than the present to begin preparing for 2012’s month-long celebration of the Hispanic heritage and culture, Hispanic Heritage Month.

    Credit unions across the country found ways to engage with their local Hispanic community’s during last year’s Hispanic Heritage Month. Our VP Miriam De Dios recently shared a few of those efforts with Credit Union Magazine’s online readers. Below is an excerpt from that article. For more, visit creditunionmagazine.com.

    All over the country, credit unions are discovering opportunities to participate in community celebrations. Maps Credit Union in Salem, Ore., is partnering with Western Oregon University to launch the Latino Education and Access Program, which helps Hispanic students further their education with scholarships.

    Fundraising for the program will be kicked off by former Mexican President Vicente Fox.

    Maps Credit Union will also be a silver sponsor of the Hispanic Heritage Month Breakfast, Oregon’s official kick-off celebration for Hispanic Heritage Month.

    Des Moines Metro Credit Union also plans to participate in its community’s Hispanic Heritage Month celebrations. The ninth annual Iowa Latino Heritage Festival will take place in Des Moines in September.

    The credit union will not only have a booth at the festival to meet with current and potential members, it will also sponsor an elote (corn) eating contest.

    How can your credit union participate in 2012’s Hispanic Heritage Month? It can be as simple as:

    • Informing your members and the community about Hispanic Heritage Month events;
    • Partnering with a local organization to support a Hispanic Heritage Month activity; or
    • Educating the Hispanic community about your credit union’s unique products and services.

    To read the full article, visit creditunionmagazine.com.

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    Reloadable Cards Offer ‘Foot in the Door’ to Hispanic Market

    Posted by on April 3, 2012

    The following is an excerpt of a newly released white paper by Coopera’s Miriam De Dios covering the potential for reloadable prepaid cards in the Hispanic market. If you’d like a copy of the full paper, send me an email, and I’d be happy to send it over.

    While our consulting capacity has allowed us to observe almost all best-practice tactics out there, we believe FIs that offer a reloadable prepaid card to the Hispanic market will be among those achieving the greatest success. Perfectly tailored to the Hispanic consumer, this type of offering has the potential to ease consumer financial pain, to build trust between cardholders and an issuing FI, and to generate fee revenue and loyalty from a powerful market.

    For FIs interested in the Hispanic market, it makes sense to think in terms of products and services that would appeal to consumers who don’t have a traditional banking relationship already in place. Creating affordable alternatives to meet the needs of underserved Americans not only has the potential to get a foot in the door of the Hispanic community; it also helps your FI lead its customers down a path to financial responsibility.

    Because they don’t allow for overspending, reloadable cards help underserved consumers manage their budget-conscious lifestyle. This puts issuing FIs in a position to nurture the financial growth of prospective members, quite possibly turning underserved consumers into some of their most loyal customers.

    Before embarking on any Hispanic outreach, however, FIs must understand the importance of building trust slowly. While product offerings – such as reloadable prepaid cards – are a great start, adding a healthy Hispanic membership base truly is a longer-term effort requiring the support of FI staff and leadership.

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    Everything’s Big in Texas (Especially the Hispanic Market)

    Posted by on March 27, 2012

    Hispanics continue to be an important group for many of America’s states. Thanks to the newly published 2011 Hispanic Opportunity Report, commissioned by the Texas Credit Union League (TCUL), we understand even more about this population in the state of Texas.

    A long-time partner of the TCUL and supporter of the Juntos Avanzamos designation, Coopera was commissioned to write the report to help Texas credit unions better understand data revealed by the 2010 Census.

    Here are a few of the report’s highlights:

    Two-thirds of the state’s growth over the past decade came from Hispanics.

    Hispanic Texans are five times more likely to be unbanked than are the state’s whites.

    Hispanics will comprise 53% of the state’s population by 2040, and whites will make up just 32%.

    If credit unions attain 10% penetration of the state’s Hispanic adults, it would mean an estimated $326 million in total income and $3.5 billion in loans.

    Of the nearly 1 million children added to the Texas population in the last decade, 95% of them were Hispanic.

    In Texas, one in five dollars of purchasing power is in Hispanic hands.

    We are pleased that TCUL has been so proactive in providing this report to its members. Texas is the first state to request specific information about credit unions’ Hispanic opportunity since the 2010 Census was finalized. Coopera believes the information in the report will motivate Texas credit unions to pursue this market more intentionally.

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    Are Hispanics Really ‘Emerging?’

    Posted by on March 20, 2012

    The 2010 U.S. Census revealed that one in six U.S. residents is Hispanic, and among children, it’s one in four. By 2050, analysts predict that statistic will soar to one in three.

    When you look at the numbers, it’s easy to see why the term “emerging,” which has been used to describe the U.S. Hispanic community, isn’t really all that fitting today. For that reason, it’s no longer appropriate to think of the Hispanic consumer as someone your credit union may need to court in the future. Rather, you need to understand how to market to this type of consumer today.

    In cooperation with CUNA, Coopera regularly surveys credit unions of varying sizes. This research has shown that a much higher concentration of credit unions have focused on serving the Hispanic market in recent years. Between 2008 and 2009, we found that the number of credit unions either executing or planning Hispanic-market programs more than tripled.

    Undoubtedly you have witnessed the growth of the Hispanic market in either yours or a neighboring community. While getting ahead of the curve may no longer be possible, there is still a tremendous opportunity to tap into the power of this population now. We advise you not to wait another year.

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