Growing Demographics Credit Unions Can't Afford to Ignore

According to the Tower Group, Hispanics are the fastest growing segment of the US population by a factor of five, now totaling nearly 40 million citizens with an expected purchasing power of $1 trillion by 2010. Credit unions have the unique ability to reach out to this underserved group and show them financial success in the community.

 
 

According to the Tower Group, Hispanics are the fastest growing segment of the US population by a factor of five, now totaling nearly 40 million citizens with an expected purchasing power of $1 trillion by 2010. Credit unions have the unique ability to reach out to this underserved group and show them financial success in the community.

Arrowhead Central Credit Union ($726 m), located in San Bernardino, CA, is one credit union that is dedicated to serving the Hispanic community. Arrowhead stands as the official credit union for over 1500 companies, fundamentally manufacturing, within the Inland Empire, made up of the San Bernardino and Riverside counties.

Because of the nature of their field of membership, Arrowhead was already serving the Hispanic market but decided in 1997 that they want to put a formal program in place. Arrowhead began working with the local Mexican Consulate in order to further their understanding of the Matricula card as an accepted form of identification and began accepting it between 1999 and 2000. This card is an official identification card issued by the Mexican Government and issued through its Consulate offices signifying that the bearer is of Mexican nationality and is living outside of Mexico.

In addition, Arrowhead credit union began forming focus groups by partnering with local communities and consisting of members from within the Hispanic community in order to determine if needs were met and what could be done further. Three different focus groups were formed due to the diversity of assimilation within the community. One was formed of affluent Hispanics, another with bilingual, assimilated Hispanics, and another with new immigrants, somewhat assimilated Hispanics.

During the fall of 2000, Arrowhead opened a branch, primarily staffed with Spanish speaking employees, in the Mt. Vernon area of San Bernardino County, an underserved community that had no financial institutions within a 5-10 mile radius. In addition, Arrowhead created credit builder products featuring a 1st time auto loan and a signature loan. These loans allow for a minimal amount to be borrowed and are given based on a member's work history and bill payment history with the intention of building the borrower's relationship and credit level within the credit union.

In efforts to help educate the Hispanic community, Arrowhead received a grant from the Richard Myles Johnson Foundation, which was established in 1958 for the purpose of promoting credit union education and building a vibrant leadership force for the future. Currently Arrowhead is actively educating the Hispanic community on buying homes, smart banking, and financial management. In addition, they are partnering with local non-profits and visiting high schools to educate 11th and 12th graders on the how to use a financial institution and the importance of saving.

Arrowhead grew membership and shares by 10.26% and 19.92% respectively in 1999 and by 14.86% and 25.94% respectively by 2000.

For more information on how other credit unions have developed business models for expanding into the Hispanic Market click here.

 

 

 

Jan. 5, 2004


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