When it comes to serving the Hispanic market, the term “business opportunity” understates the case.
“It’s a necessity,” says Victor Corro, CEO of Coopera, which helps credit unions nationwide attract and serve Hispanic members. “You need younger members to stay relevant, thrive—even survive. If you don’t reach out to the Hispanic market, you’re not only missing a 20% slice of the market, but a younger and growing one at that.”
He notes the Hispanic market skews much younger—the median age range is in the 20s while the average age of adult credit union members is 49, according to CUNA's 2019 Credit Union Awareness survey. As older members move past their peak borrowing years, credit unions need new, younger members who are heading into their peak earning years, starting families, and seeking auto loans and mortgages.
More than half of the children born in the U.S. in 2020 will be from racial or ethnic minority groups, according to the U.S. Census Bureau. By 2044, when that generation comes of age, the U.S. will no longer be majority white.
The nation will become “majority minority,” meaning most residents will identify as what are now racial or ethnic minority groups. This requires moving beyond one-size-fits-all operations and embracing changes in marketing, customer service, management, and product offerings.
“It’s going to take time for credit unions to get there,” Corro says. “But I’m confident they will because they care about people.”
While Hispanics comprise 20% of the U.S. population, they account for 6.8% of overall credit union membership, according to CUNA’s 2019-2020 Credit Union Environmental Scan Report.
That leaves a big opportunity to serve that demographic, Corro says.
‘Know your membership on a deeper level. The Hispanic/Latino market isn’t monolithic.’
A good starting point is learning about your membership’s ethnicities and cultures, says Corro, citing valuable and free demographic information from the U.S. Census Bureau, Pew Research Institute, and area school districts.
But don’t stop there. “Conduct a comprehensive analysis to get to know your membership on a deeper level because the Hispanic/Latino market isn’t monolithic,” he says. “All potential customers are not the same.”
Consider whether you’re serving mostly first-, second-, or third-generation U.S. residents.
“Generally speaking, third-generation prospects may prefer English, the second generation bilingual, and the first generation Spanish,” Corro says. “But you shouldn’t guess or assume any of these data points.”
Go beyond simply translating your website into Spanish, he advises, and don’t expect new members to easily adapt to your current products and services. “Take the time to ask, ‘What does this community need?’”
Vantage West Credit Union in Tucson, Ariz., is among a growing number of credit unions offering citizenship or immigration loans, which make the cost of naturalization and applying for citizenship easier to bear.
The product is a small but important part of the $2 billion asset credit union’s portfolio, says Luis Soto, marketing manager. “Even if it’s only for a minority of our members, it’s a good opportunity to provide value to our community.”
Vantage West also offers “Cash Please,” a payday loan alternative up to $1,000 with a 25% annual percentage rate—far lower than the 300% many predatory lenders charge. “We wanted to offer a better alternative to payday lenders,” Soto says.
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