President Obama’s executive actions on immigration creates an opportunity for credit unions, according to experts.
As unbanked or underbanked Hispanics transition into the financial mainstream, credit unions can build new and lasting relationships.
“We see these executive actions as a moment of opportunity,” says Cathie Mahon, CEO/president of the National Federation of Community Development Credit Unions during a joint webinar with Coopera this month.
One immediate connection point, Mahon says, is helping undocumented immigrants afford the application fees needed to obtain legal status.
Credit unions can promote saving products or offer microloans to pay for the fees, which are around $400 to $700.
“It is an innovative way to get people to be able to pay for the fees, but also to get them linked to the credit union and develop a lifelong connection,” Mahon says.
While the president’s action provides credit unions a specific opportunity to reach out, Coopera encourages credit unions to think about long-term growth.
Credit union leaders who think strategically about membership growth can’t afford to ignore the Hispanic market, says Coopera CEO Miriam De Dios. There are an estimated 11.7 million undocumented immigrants currently living in the U.S., and the Hispanic demographic will continue to grow.
“This is about a sustainable strategy,” says De Dios.
To get started building infrastructure for long-term growth among Hispanics, De Dios encourages credit unions to follow four steps.
1. Conduct a readiness assessment. Ask questions such as, do we have a welcoming culture? Do we have bilingual capacity? Do we offer small dollar loans? Do we accept alternative forms of ID?
2. Develop a strategic growth plan. Identify relevant target markets and the tactics and strategies needed to communicate to them. Create a task force, build buy-in, and set goals.
3. Make operational adaptations. Put in place the people, tools, and processes needed to accommodate Hispanics successfully.
Adapt to meet their needs. Offer the financial products they need today, such as small-dollar loans, and transition them over time to more mainstream products.
4. Build partnerships. Identify potential community partners working with Hispanics in your area.
Consider if your missions overlap and whether you can work together. Then mobilize your community outreach personnel and organize events.
The webinar, “Immigration Executive Order and Financial Inclusion,” which also includes a presentation by a representative from the U.S. Citizenship and Immigration Services, is available for free from CUNA.
It is the first of a two-part series about reaching out to the Hispanic community. Part two, scheduled for Feb 11, will focus on best practices for credit unions seeking to serve the Hispanic community.