On May 21, the Senate Judiciary Committee approved the immigration reform bill before it by a vote of 13-5. Although this is merely the beginning of what is sure to be a lengthy legislative process to push proposed reform through to law, it is a positive sign that what has been called “a deep divide” among legislators can be overcome.
Why should credit union leaders care about immigration reform? For two reasons:
1. Reform promises to be good for the U.S. economy as a whole. In fact, it has even been referred to as an economic stimulus in its own right.
2. Reform represents an outstanding potential opportunity for credit unions to further develop financial relationships with current Hispanic members and to grow overall membership by attracting new Hispanic members.
The proposed path to citizenship, which is a major function of the proposed reform, could mean a virtual opening of the floodgates for new credit union members, particularly from among the fast-growing Hispanic community.
There are an estimated 11 million undocumented immigrants living in the U.S. today, about 60% of whom are Mexican, according to the Pew Hispanic Center.
A path to citizenship—regardless of the final format it takes—will send many of these young, financially underserved families out to find community partners capable of helping them achieve their life-long American dreams.
Credit unions, with their “people helping people” philosophy and core competencies aligning with service to nontraditional consumers, will make ideal community partners in this pursuit.
The opportunity to help aspiring, new Americans with their financial goals will come in several forms. For starters, newly documented immigrants will be able to open checking and saving accounts, buy homes, start small businesses, and seek educational opportunities with more ease.
In addition, the process of obtaining U.S. residency and citizenship likely will remain costly. Prospective members will be looking for financial institutions willing to loan them the funds necessary to complete the many stages of the immigration naturalization process.
Many credit unions have already begun to establish programs for their local Hispanic communities, which are made up of both immigrant and U.S.-born groups. These credit unions will certainly have a leg up in the competition to win business from the Hispanic immigrant families impacted by reform.
But it’s not too late to start. View your Hispanic outreach strategies of today as an investment in your credit union’s strategic future.
These strategies may include the recruitment of bilingual and bicultural staff, the cultural training of your board and staff, the adaptation of your products and marketing strategies, and the overall alignment of your credit union’s cultural disposition and operational strategies.
Think of your credit union’s progress in the same terms as the journey of a new American. A recent Filene Research Institute report made a keen observation—one I’ve experienced first-hand: “As immigrants’ time in a new country increases, their language skills and income often follow suit. The financial products that immigrants require increase in complexity as time goes on.”
My Mexican-immigrant upbringing is testament to this financial trajectory.
When my parents arrived in the U.S., they were weekly payroll check-cashers who used money orders to pay bills and borrowed cash from friends and family to buy used cars.
After learning of traditional financial institutions by word-of-mouth, they felt comfortable enough to approach them. They became bank customers and credit union members with savings and checking accounts, debit and credit cards, consumer loans, and mortgages.
Today, 100% of my immediate family is banked. We have developed long-term, loyal financial relationships that have helped us achieve our financial goals over time.
The takeaway for credit unions: Start small and follow a strategic growth roadmap.
Start by understanding the makeup of your local Hispanic community and your credit union’s cultural disposition and strategic intent to serving a new market. These initial steps will make adapting to the Hispanic community—instead of forcing the Hispanic community to adapt to the credit union—a much easier journey.
Now is the time to examine your credit union’s growth path and ensure that a Hispanic growth strategy is a part of it. If you haven’t already started serving the Hispanic community, beginning now will ensure a first-mover advantage to serving newly documented Hispanic immigrants who’ll be clamoring for financial services upon the enactment of immigration reform.
Credit unions are their best option—don’t let them go anywhere else.