ATLANTA - Even as several start-up banks that were targeting the Latino population have given up and started mainstreaming, a start-up CU in Georgia is looking to succeed where those banks failed.
Paola Diaz-Torres, one of the organizers of the start-up, said the CU hopes to tap into the niche market of largely unbanked recent Latino immigrants that call the Atlanta area home and have a tendency to carry large sums of cash on their person.
“We estimate that about 45% do not have full access to traditional financial services,” Diaz-Torres said. “Realistically, we think we may be in worse financial circumstances in this state and we don’t know the exact numbers, but we do know there is a tremendous need.”
Along with fellow organizer Yahnia Rodriguez, Diaz-Torres says that the fledgling credit union has already received approximately $700,000 in seed money for operational expenses and pledges for its loan fund.
Most of the start-up funding came from IDEAS, a Decatur, Ga.-based nonprofit that encourages microfinancial initiatives that help the poor and from the Marcus Foundation created by Home Depot founder Bernard Marcus.
Modeled on the success of the Latino CommunityCU in North Carolina, Diaz-Torres says the new credit union will operate primarily as a Spanish-language entity called the Georgia Family CU.
A Tremendous Opportunity
She says there is a tremendous opportunity for the CU to gain a foothold in the area because credit unions aren’t making an attempt to capture this population. “There isn’t a single credit union locally that is reaching out to this market but with our specific strategies, we have found a niche,” Diaz-Torres said.
One strategy organizers plan to use is to hold the membership drives along the Buford Highway corridor north of the city in areas identified as having high concentrations of Latino immigrants. The strategy pulls from the Latino tradition of there being a plaza where people gather to shop and socialize–a place where Diaz-Torres hopes to recruit new members. “There is a place in Atlanta called plaza fiesta that normally sees over 1,500 people in a weekend,” she says. “That’s where we plan to be.” She said she hopes to have as many members when the doors are eventually opened for business sometime later this year.
According to the University of Georgia’s Selig Center for Economic Growth, in 2002, Hispanics had $580 billion in spending power. The same study ranked Georgia 3rd for the growth in Hispanic buying power between 1990 and 2002. Only North Carolina and Arkansas experienced more rapidly increasing Hispanic buying power than Georgia over the same time period.
Federation Is Advising Start-Up
The National Federation of Community Development CUs is acting as the start-up’s primary mentor and advisor. “We’ve been working with them for probably better than a year at this point,” said Cliff Rosenthal, CEO of the Federation.
Rosenthal, who is acutely aware of the hurdles placed in front of start-up CUs, hopes that the credit union will receive its charter from NCUA soon. The credit union has been in the organizational stage since the fall of 2006. “Two years unfortunately is not unusual and we would hope that two years from the initial organizing that this would be possible,” Rosenthal said.
Getting the Atlanta-based Marcus Foundation was key for Diaz-Torres. In 2002, the foundation pledged over $200 million to build the Georgia Aquarium and in the wake of the anthrax attacks after 9/11, the foundation pledged $3.9 to the Centers for Disease Control to combat the threat.
Diaz-Torres extensive not-for-profit experience also lends itself well to the credit union model. A Director of the SBA Women’s Business Center at Cobb Microenterprise Center and SBA Atlanta Women’s Business Center, designed and implemented marketing strategies to grow minority business owners’ client bases.
As a coordinator for both the Refugee Women’s Network, Inc. and CARE, Diaz-Torres learned to foster strategic alliances with local organizations related to micro enterprise, refugee, and immigrant concerns. She also helped to reformulate the production and operational processes of rural micro businesses.
About two years ago, Diaz-Torres brought Yale-educated Yahnia Rodriguez onboard as the credit union’s membership director. Rodriguez has lived in Georgia since 1985 and held several executive positions with Wachovia Bank.
Rodriguez said that despite the lofty goals the pair have in place for the credit union, the mission will be firmly rooted in the cooperative spirit. “Our mission is to bank the unbanked and serve the multicultural communities in Georgia,” she said. “We do not need to focus on anything other than serving those who need affordable financial services and quality financial education.”
