Part I of a Two-Part Report
Credit unions have stepped up their outreach to the fastest growing and single largest minority group in America today- Hispanics- starting by understanding cultural differences and following up with customized marketing to attract this diverse yet skeptical group. The reward is that a Credit Union can earn an entire family's loyalty and make further inroads to a community in need of financial products and services that remains to a large degree unbanked.
Harriet May, President/CEO of Government Employees Credit Union in El Paso, Texas (assets of $938m) told attendees at a Callahan and Associates Webinar titled ''Marketing to the Hispanic Community'' on January 7th that it is crucial for Credit Unions to understand the $1billion spending power of the nation's 35 million Hispanics. ''There are nearly 8 million households and only 38% of them have any banking relationship,'' she said.
Hispanics nationally are now 13.3% of the population, but make up 78% of El Paso residents and have a median annual income of $35,000, said May. In many areas, Anglos are the minority, yet GECU has no specialized business plan to serve Hispanics because as a community charter- and one founded to serve blue-collar workers- it is superfluous.
''They are our community; in fact, they are us,'' May said. GECU's staff is 80% Hispanic, matching the city, so she has long been aware of the leading obstacle to providing banking services: distrust. ''This comes from the failures of the financial system in Mexico, so please don't use the words 'credit union' (uniones de credito) but do use the term cooperative (cooperativa),'' she advised.
May offered marketing lessons learned from experience, like using radio rather than TV, and the use of bright colors in printed pieces (always in Spanish). Those ads should also highlight what resonates in the Hispanic community: family, cultural heritage and religion. And don't think that just offering IRNet (International Remittance Network) will result in a bounce in Hispanic membership, either, she said. ''You can't just hang out a shingle; you've got to market it!''
Realizing that one family member can have many lines of credit, it's best to offer products that meet those needs, like recognizing alternative forms of ID, offering entry level share accounts ($20 minimum) and SmartSaver CDs. Home buying programs through El Paso's Affordable Housing CUSO feature low down payments and various credit-granting techniques (another Credit Union's ''B'' paper is GECU's ''A'' paper). But financial literacy programs are where the potential for the greatest growth lies, said May, especially for those CUs unafraid of risking higher delinquency rates.
''Hispanics will repay loans from the credit union. In fact, they'll neglect other bills to pay us. They'll eat beans if necessary, but they'll honor a pledge to us because we gave them something they didn't get elsewhere.''
Over the years, May said she has witnessed families send children to college by saving small amounts of money and buying CDs. ''There is nothing more rewarding than being a part of that.''
Would you like to hear this credit union's story directly from the CEO's point of view? It's not too late. Pick up a copy of this webinar on CD-ROM