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Iowa CUs embrace Hispanic growth
AMES, Iowa (9/12/12)--Hispanic Heritage Month is Sept. 15 to Oct. 15. One state where Hispanic culture has taken on increased significance in recent years is Iowa.

Iowa is not typically considered to be a multi-cultural magnet, but the rural Midwestern state is among the top 10 states where Hispanic buying power is growing the fastest, according to a 2012 University of Georgia study.  Many small, rural Iowa towns are approaching 50% in Hispanic population. The Hispanic population in Iowa grew 91.6% from 2000 to 2011, according to the Data Center of Iowa. By 2040, Hispanics will represent 12.7% of the state's population.

The driver of the Hispanic population growth is Iowa's agricultural and meat processing and packing industries, according to Anna Peña, client account coordinator at Coopera, an Iowa-based economic development firm focused on the emerging Hispanic market, which presents unique growth opportunities for credit unions.

"The initial trigger was economic opportunity in the form of agricultural and meatpacking plants, but now we're seeing the birth rate of resident Hispanics increase and more families are moving into the state's larger cities," Peña told News Now.

The growth has presented opportunities for Iowa credit unions, Peña said.

"Credit unions have really adapted to the market, not necessarily by creating new infrastructure but using their existing brick and mortar," Peña said. "In some areas, where member growth and loan growth were stagnating, Hispanic membership has been a primary driver of growth."

Ames-based Greater Iowa CU, with $301 million in assets, is among the credit unions that have achieved growth by adapting its service and marketing strategies to the Latino market.

Greater Iowa's Denison branch serves 35% to 40% Latino members, according to Michael Adams, Greater Iowa vice president of marketing and public relations. Denison's population is about 45% Latino, Adams said. The credit union's East Des Moines branch serves roughly 19% Latino members, according to Adams.

In its Denison branch, three of the four employees speak Spanish. Three of seven employees in the East Des Moines branch are bilingual. "That is that type of adjustment you need to serve this community," Adams told News Now. "But it's also about reaching out to the community. We also participate in cultural events and offer basic financial education in Spanish."

Greater Iowa CU also has added products tailored to the Latino community, such as remittance services and prepaid cards.

The credit union offers Individual Taxpayer Identification loans, which are made to members without Social Security numbers. "Banks certainly won't get involved with these and a lot of credit unions are wary of them," Adams said. "In two-and-a-half to three years we've been doing them, we have not had any issues. They are a great product for us."

Greater Iowa CU dedicates 15% of its marketing budget to the Hispanic market. The credit union offers a Cosa de la Vida loan, which is underwritten as a standard consumer loan marketed to the specific cultural needs of the Latino community, such as Quinceañera (a traditional celebration of a girl's 15th birthday) or the immigration process.

In the first quarter, Greater Iowa's CU's growth among its Hispanic membership was 8%, outpacing the 2% rate of overall membership growth. About 37% of Great Iowa's Latino members have loans. Roughly, 49% have checking accounts, the same as general membership, Adams said.

"There's very real growth there, and it's not just a social mission, though part of being a credit union is reaching out to the underserved," Adams said. "We have achieved a return, and it's been very rewarding for us."

Coopera works in partnership with the Credit Union National Association (CUNA) and credit unions to help credit unions nationwide grow by serving the Hispanic community. Coopera and CUNA designed El Poder es Tuyo (The Power is Yours), a customizable, Spanish-language personal finance website for Hispanic credit union members and potential members. For more information, use the resource link.
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