DES MOINES, Iowa (2/25/14)--Misconceptions about the Hispanic market may be hindering credit unions' ability to better serve this growing demographic, according to a new white paper from Coopera.
Written by CEO Miriam De Dios, the paper outlines five common misconceptions--ones that hamper progress for Hispanics and the businesses that want to serve them.
Myth No. 1: All Hispanics are undocumented. Nearly three in four of the country's more than 52 million Hispanics are U.S. citizens. As of 2009, more than 62% of Hispanics were born in the U.S., and another 11% are naturalized citizens. Many second-generation Hispanics consider themselves "typical Americans" but have a strong preference for identifying with their family's country of origin. "This underscores the need for credit unions to acknowledge a prospective member's culture," De Dios wrote.
About nine million of the 11 million undocumented workers are Hispanic, and De Dios noted that credit unions are in an ideal position to make the dream of citizenship a reality. "The industry may soon have an even greater opportunity to develop financial relationships with these goal-oriented immigrant consumers, which include immigrants from all parts of the world," she wrote.
Myth No. 2: Hispanic foreign nationals cannot be credit union members. The matricula consular, passports and Individual Taxpayer Identification Numbers can be used as alternate forms of identity. With these tools, credit unions can maintain compliance with the Patriot Act and build relationships.
Myth No. 3: A massive Spanish translation effort could take years. Credit unions mistakenly believe that they will have to translate every document, form and disclosure into Spanish. "Spanish-language materials (or better yet bilingual materials) will only be required for those products and services deemed essential to the strategic Hispanic member growth plan," De Dios wrote. Credit unions shouldn't take the easy way out and only target English-speaking Hispanics, she advised.
Myth No. 4: Only second-generation Hispanics are open to a traditional banking relationship. Targeting the next generation is attractive. They likely have higher incomes, higher education and higher trust in financial institutions. However, the interdependence between generations cannot be denied. "High-value young Hispanics will come through the credit union door much more readily if their parents have already passed through it," De Dios said. Conversely, some youth are the English-speaking "advocates" for their parents or elders when forms need to be signed.
Myth No. 5: Hispanics only want transaction-based products. Coopera's experience with its clients found that product penetration was increasing faster among Hispanic members compared with non-Hispanic members. At 5.5%, the median growth rate for checking penetration was more than three times the median growth rate of 1.7% for non-Hispanics. Loan penetration was 4% compared with 3.4% of the non-Hispanic segment. The services per member median growth rate also increased 1.5% compared with 0.8% of the non-Hispanic market.
Attendees at Credit Union National Association's 2014 Governmental Affairs Conference in Washington, D.C., this week can pick up a copy of the white paper at Coopera's booth--329--in the exhibit hall.