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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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    Milwaukee Credit Union Gets Back to Its Roots through Service to Hispanic Community

    Posted by on January 9, 2017

    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.”

    prime-financial-logo-ogGetting 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.”

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