FARMERS BRANCH, Texas (7/23/14)--Hispanics are likely to have clear financial goals but are unsure about how to achieve them, according to a recent survey by Prudentia, thus giving credit unions an opportunity to start conversations about how they can support these goals.
Prudential's "Hispanic American Financial Experience" report found that personal debt is culturally taboo--62% indicated there is no such thing as "good debt"--and the desire by almost half of respondents to pay for items with cash.
However, nearly 70% recognize that living debt free is not possible, which may create educational opportunities for credit unions and other financial institutions, the report noted.
The Prudential study was conducted Oct. 28-Nov. 18 and polled 1,023 Americans age 25-70 who self-identified as Hispanic, had a household income of more than $25,000 and had some involvement in household financial decisions.
Through increased community involvement and financial literacy opportunities, credit unions can engage the Hispanic community in setting goals. This is a tactic taken by some credit unions in the Cornerstone Credit Union League's Juntos Avanzamos program.
"There is a great financial opportunity for credit unions in the Hispanic market," said Bob Peterson, chair of Cornerstone's International Relationship Committee (Leaguer July 17). "However, if we want to earn their business, we have to be at the forefront of educating them on how we can help them meet their financial goals."
Peterson is also president/CEO of $90 million-asset OneSource FCU, El Paso, Texas--one of 28 credit unions that have received the Juntos Avanzamos (Together We Advance) designation.
The Prudential survey also asked what financial institutions could do to better meet Hispanics' needs. The leading answer was to be more involved in the community, followed by having the ability to communicate in Spanish; offer financial education for the community; tailor products/services to the community; provide jobs for Hispanic workers; and use easy-to-understand language.
Southwest 66 CU, Odessa, Texas, has tailored products and services to its local Hispanic community. President/CEO Sean Cahill said the $85 million-asset credit union--also a member of the Juntos Avanzamos program--has created a number of specialty loans including a "borrow and save" loan to combat payday lending and establish savings behaviors and a quinceanera loan to cover the cost of celebrations held for girls' fifteenth birthdays (Perspectives June 26).
"The thing we are most proud of is our citizenship loan, as it combines funding with community partnerships," Cahill said. "There are five unique stages to this loan, and each stage requires a commitment from the member before the next portion is funded. We use a local attorney to ensure the member is protected, and make local (English as a Second Language) partnerships to bring the greatest value to the member. We even offer a loan for a suit or dress for the member to wear while attending their citizenship ceremony."