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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NCUA Office of Small Credit Union Initiatives

Build trust

Credit unions, after all, aren’t the first industry to recognize the growth of the Hispanic population and see dollar signs. Many financial institutions have launched efforts; few have sustained them.

Miller says United Educational encountered some of that skepticism in its early outreach efforts, and the credit union had to work hard to convince the Hispanic community that its efforts were part of a long-term growth and service strategy.

“You need to let them know you’re sincere; that you’re not just looking to make a quick buck,” Miller advises. “The Hispanic community has seen a lot of financial institutions do a cursory effort.”

That’s why De Dios advocates beginning with grassroots campaigns and community outreach prior to any product or service launch. She recommends identifying partners in the Latino community, establishing relationships with Hispanic business leaders and service providers, and providing financial education and workshops before actively recruiting Hispanic members or branding any Latino products.

Familiarity helps. United Educational and Greater Iowa both cultivate exposure by participating in local cultural festivals to raise their profiles and  demonstrate commitment.

Another strategy De Dios recommends is formalizing some of these relationships by creating a Hispanic advisory board. “Credit unions can use that group as a sounding board for different ideas, to brainstorm, and to get feedback about what the community might think about specific products or services,” she says.

But the real benefit, De Dios says, comes when these advisory board members stop serving as simple resources and become advocates. Over time, these Latino community partners begin to refer new members and recommend candidates for employment or board appointments at the credit union.

Members of the local Latino community see that happening—they know when a neighbor becomes a loan officer or when a relative becomes a director—and that speaks more powerfully than any ad campaign or name on a 5K race banner.

“It shows trust,” De Dios says. “You will certainly employ some traditional forms of marketing, too, but the grassroots efforts are about building trust.”

Building trust, of course, takes time, and successful outreach to the Hispanic community won’t happen overnight. “Don’t wear rose-colored glasses,” Miller cautions. “If you do it right, [outreach] is a lot of work. It requires a lot of time, effort, and money. Look at it as an investment.”

Godfrey agrees. “It’s a growth strategy for the credit union,” she says, pointing out that building Latino business not only expands the membership base, it also lowers the average age of membership.

That’s important, Myers adds, because younger members borrow more than older members, and lending is where credit unions make their money.

The experts are quick to dispel worries that serving the Hispanic community requires creating a completely separate suite of products and services. Some of the products marketed to Hispanic members already exist under different names, and others appeal to the general membership.

A Quinceañera loan (used to celebrate a girl’s 15th birthday), for example, is really just a personal loan with specific branding and marketing. And United Educational’s American Dream loan, designed to help underbanked Latinos build credit histories, became a general credit-builder loan.

Plus, Godfrey adds, the policy and procedural changes the credit union made to serve the Hispanic community created opportunities to serve other populations. Now, United Educational serves the Amish, who generally do not use photo identification, as well as foreign students studying at nearby Albion College.

“Everything we’ve done when we started looking at the Hispanic community crossed over to our general membership,” Godfrey says.

While she recognizes the business benefit in tapping the Hispanic market, Godfrey says there’s more to it than that. For the 37-year industry veteran, Hispanic outreach ultimately boils down to mission and purpose.

“The bottom line is that this is what we do,” she says. “We reach out into the communities we serve. We are doing exactly what the credit union is supposed to be doing.”

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