The president’s executive orders on immigration are a huge opportunity for credit unions, and some of the movement’s leaders are trying to seize the day.
In November, Barack Obama cleared the way for an estimated five to seven million undocumented immigrants to seek the documentation they need to legally work and go to school — and more easily open accounts at financial institutions — without fear of detection and deportation.
"If you meet the criteria you can come out of the shadows and get right with the law," Obama said when he announced the orders.
“This is the biggest development for undocumented immigrants in the past 30 years,” says Pablo DeFilippi, director of membership for the National Federation of Community Development Credit Unions.
Credit unions are uniquely positioned, DeFilippi says, to be the trusted financial partner for 10 million or more people, adding in the children of the adults here trying to build secure futures for their families.
“What if we could get 10% of that market,” he asks. “That would be a quantum leap forward in terms of growth rate.”
The federation is working with Hispanic marketing specialist Coopera to hold a series of workshops and roundtables discussions with non-profit organizations that focus on serving the immigrant community. The next one is Feb. 12 in New York City.
They’re titled Financial Inclusion for Immigrant Consumers and that’s the goal. “This is a tremendous opportunity for the credit union industry as a whole,” says Miriam De Dios, the CEO at Coopera who also is participating in a two-part webinar with CUNA. The second part of that effort also is next week.
Meanwhile, Coopera and the Federation are surveying credit unions about their plans for serving immigrants in 2015. “There’s lots of interest there,” De Dios says. She says a number of credit unions already serve that market, including pushing products that compete with payday lenders or specifically help pay for expenses in obtaining legal status.
Working with local partners who already have worked with — and learned from — their immigrant community is a major tactic going forward.
One example underway is at Travis Credit Union ($2.3B, Vacaville, CA). Based on informal savings/borrowing circles, the New Era Tanda Loan combines cultural customs with the credit union experience. It centers on a 12-month shared savings goal that then qualifies participants for other savings and lending offerings.
Travis got a grant from the National Credit Union Foundation to launch the program in 2012 as a small-dollar lending pilot, working with Coopera and a local immigrant family resource center. The first small group took financial literacy classes while successfully combining their savings to qualify for a share-secured auto loan.
That’s one example. De Dios and DeFilippi say a variety of products and approaches will be needed to capitalize on the industry’s chance to step up.
“We’re trying to figure out how to bring millions of underbanked and unbanked people out of the shadows and into affordable banking accounts with trustworthy partners,” De Dios says.