Overcoming Obstacles to Serve Hispanics

Many CUs hesitate to reach out to Hispanics due to misinformation, myths, and misunderstanding.

November 19, 2012
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Hispanics are among the nation’s fastest-growing populations, they’re largely unbanked, and their average age is more than a decade younger than the average American.

So por qué aren’t more credit unions courting the Latino community?

It’s hard to ignore the numbers. There are more than 50 million Hispanics in the U.S., and from 2000 to 2010, the U.S. Hispanic population grew 43%.

Current trends suggest the total Hispanic population in the U.S. will reach 133 million by 2050, and constitute nearly 30% of the total U.S. population.

By population alone, it’s an attractive market. Consider that less than half of Hispanics fully use mainstream financial services and the opportunity grows even larger. It’s a bit surprising, then, that credit unions aren’t tripping over each other trying to get Hispanics in the door.

Of course, there are some obstacles to serving this market, not the least of which is a language barrier. While more than half of the nation’s native Spanish speakers say they also speak English “very well” or better, 17 million don’t speak the language well, if at all. That makes conducting any business—let alone financial services—quite challenging.

And the language is simply where the service gap begins, not where it ends. There are cultural and behavioral differences that also can distance credit unions from the Hispanic community.

Thus, accommodating Spanish-speaking Latinos involves more than translating brochures and forms. Truly welcoming Hispanics with culturally sensitive products and services requires research, planning, policy changes, and, at times, unorthodox marketing strategies.

Plus, credit unions can encounter both internal and external obstacles along the way.

But for some credit unions the issue is far simpler: If they never consider the demographics of their markets, they might not recognize the vast opportunity available to them.

This happens too often, says Bill Myers, director of NCUA’s Office of Small Credit Union Initiatives. “Credit unions miss an opportunity when they don’t recognize and serve a substantial population in their community.”

Fran Godfrey, CEO of United Educational Credit Union in Battle Creek, Mich., agrees. Godfrey and other credit union staff had certainly noticed the area’s changing demographics, but she was surprised when she reviewed actual Census Bureau figures for the communities where the $115 million asset credit union maintains branches.

The growth patterns fueled further research, which led to formal Hispanic outreach efforts in 2009.

Godfrey suspects other credit union leaders would be surprised at the extent of the opportunity in their own back yards, and she encourages them to review recent Census figures to obtain population statistics for their service areas. The agency provides detailed data and reports about the Hispanic population down to the county level.

The Pew Hispanic Center also compiles data about the Hispanic population, and CUNA maintains a set of resources for credit unions as well.

United Educational not only used Census figures when planning its entry into the Hispanic market; the credit union still relies on the data to set targets and goals for Latino outreach efforts.

Joan Miller, an executive assistant who handles marketing for the credit union, would like individual branches to reflect the population of the communities they serve. So if a county has a 6% Hispanic population, she wants United Educational branches to have 6% Hispanic membership in that area.

NEXT: Other obstacles

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