Removing barriers for Hispanic consumers

Illiana Financial Credit Union began to notice changes in the population across its service area in the Southern Chicago suburbs in 2013. Three of its four branches were in areas with a high concentration of people with Individual Taxpayer Identification Numbers (ITIN), meaning they did not have a Social Security number but they had an alternative form of identification issued by the IRS. 

But those ITIN holders were almost completely unbanked. None of the financial institutions in the area—except a few lenders who offered car loans at high interest rates—offered any products for these individuals. 

“Demographics are changing, and we have to change with them,” says Marisela Zambrano, director of business development for the $291 million asset credit union in Calumet City, Ill. 

At the time, Zambrano says she and many others in the organization didn’t know what an ITIN was. They set out to learn everything they could about how to expand their services to the Hispanic population, regardless of their immigration status. 

That effort began a process of transformation that led to Illiana Financial becoming the state’s first credit union to receive the Juntos Avanzamos (“Together We Advance”) designation, which is awarded to credit unions who show a commitment to serving and empowering Hispanic consumers.

The Cornerstone Credit Union League developed the program nearly 20 years ago as a Hispanic outreach program in Texas. In 2015, Inclusiv began expanding the program nationally.

Since then, the program has grown to 115 credit unions in 26 states, plus Washington, D.C., and Puerto Rico. 

To receive the designation, credit unions must show they're working to eliminate barriers that keep Hispanic consumers and immigrants outside the mainstream financial system. This includes employing bilingual staff, accepting alternative forms of identification and proof of income, and providing financial education.

It’s not about just checking a box with a product that caters to Hispanic consumers, says Pablo DeFilippi, senior vice president of membership and network engagement with Inclusiv.

“The Hispanic community needs what everyone else needs,” DeFilippi says. “It’s not about remittances or quinceañera loans. It’s about the whole package—mortgages, business lending, college loans, the whole gamut.”

The U.S. Hispanic population reached 62.1 million in 2020, up from 50.5 million in 2010, a 23% increase, according to Pew Research Center.

A lack of trust

Many members of the Hispanic community have lost trust in financial institutions after years of using predatory lenders, DeFilippi says. Getting the Juntos Avanzamos designation can help rebuild that trust, but only when institutions change their practices to be more inclusive.

“It’s not about just cherry-picking which type of Latinos you serve, such as only those with credit histories,” DeFilippi says. “That sends the message that we’ll serve you, but not your cousin or your brother.”

At Illiana Financial, staff had to get creative to figure out how to provide services to ITIN holders who didn’t have access to pay stubs because many are paid in cash. 

“We had to think outside the box,” Zambrano says. “We had to write a policy that accepted different forms of proof of income.”

From 2013—before Illiana implemented any ITIN programs—to 2021, the credit union’s assets have grown 49% to $291 million. Its total loans have grown 23% to $122 million, with ITIN products playing a big role in that growth, Zambrano says.

Another credit union that received the designation about two years ago has also seen significant growth from its ITIN programs.

Notre Dame (Ind.) Federal Credit Union started an ITIN lending program three years ago and watched its portfolio grow to $25 million. The credit union’s ITIN checking account program has more than $10 million in deposits, says John Wilkening, chief retail officer and Northwest Indiana market president at the $900 million asset credit union.

“When you earn that designation, it gives that credibility,” Wilkening says. “The consumers just want someone to trust.”