ABOVE: Arcelia Martinez and her two children now own a Cadillac Escalade—her dream car—thanks to improving her financial standing through the Des Moines (Iowa) Metro CU Credit Builder program. Account relationship specialist Jose Garcia is a driving force behind the program.
When multinational banks started siphoning business from Des Moines (Iowa) Metro Credit Union by offering credit cards to participants in its successful credit-builder program, Traci Stiles quickly shifted tactics.
The credit union’s director of business development received authorization to issue people in the second phase of the program a credit card along with the traditional $500 six-month signature loan, rather than make them wait until the end of the program.
The Credit Builder credit card, which carries a 13.5% annual percentage rate, creates no additional exposure for Des Moines Metro but has generated excitement and loyalty among members.
In three months, the credit union has issued 20 cards. That’s a point of pride for a single-branch, $50 million asset organization with a roughly 1,000-card portfolio.
“We didn’t want to build up our members’ credit and then have them go somewhere else,” Stiles says.
Since contracting with Coopera in 2010, Des Moines Metro made a concerted effort to reach Hispanics, who now represent 15% of its roughly 5,900 members. Stiles and account relationship specialist Jose Garcia spearhead and closely monitor outreach efforts.
The credit union, which has a bilingual front-line teller staff—and six Spanish speakers among its 16 employees—serves many members who rely on their Individual Taxpayer Identification Numbers (ITINs). After hearing the hurdles they encountered in attempting to build credit without Social Security numbers, Des Moines Metro created the Credit Builder program.
About 130 people have completed the program and now use the credit union as their primary financial institution. Graduates’ average credit score is 640.
Des Moines Metro has generated about $270,000 in loans to graduates of the program with $6,900 in charge-offs.
The credit union advertises the program’s successes in local Hispanic media. One commercial talks about a member who bought her parents a house; another explains how a member purchased her dream car, a used Cadillac Escalade.
“Sometimes there’s a perception that if you’re a small credit union you can’t do certain programs,” Stiles said. “This is our niche in the market. This is what’s helping our credit union grow.”