'Immersion' Leads To Success At 1 CU
FORTH WORTH, Texas-Appealing to the Hispanic market isn't as much about battling payday lenders and check cashers as it is about immersing the CU within the local community.
The $166-million Unity 1 CU learned that lesson the hard way, and has corrected course to have its branch in the Northside suburb of Fort Worth thriving. The office serves more than 2,500 members, has a deposit base of $7 million, $2.7 million in loans outstanding, and 50% of its members hold checking accounts.
Five years ago Unity 1 realized Northside lacked financial services, outside a glut of payday lenders. CEO Gary Williams decided to open a branch to serve the underserved market, but just as importantly to drive the credit union's growth. "What we expected to happen initially did not," said Williams about poor membership results from the CU's initial effort to market the branch.
Local payday lenders and check cashers all have large, lighted signs, and big banners touting their offerings, the CEO explained. "So we put a big electric sign on the front of our branch and some banners that said we'd cash checks for $2, make cheaper wire transfers, those sorts of things. We started out trying to look like a payday lender."
Despite having lower-priced products (the CU's payday loan APR is 18%), the marketing strategy did not work. "We have been largely unsuccessful getting people who use these types of payday services to move that financial activity over to the credit union," Williams shared.
The CEO and his staff concluded that the Hispanic community in Fort Worth does not care about the high fees and rates at payday lenders. "They like the fact they can go in these places and get their money, no questions asked. They are in and out. That appeals to them," Williams said.
Understanding the credit union could not break the hold payday lenders had on the community for check cashing services, it switched its approach to focus on community involvement and more mainstream financial services. "We began making our branch the hub of community activity," Williams explained.
Unity 1 began sponsoring numerous community events, such as creating and sponsoring a soccer tournament that has become an annual event. The community room in the credit union is big enough to hold large gatherings, like chamber of commerce mixers and financial literacy seminars.
"For four years we have held an event called 'Gear Up For School,' where we partner with local businesses and organizations to give away free school supplies," Williams said. "This year we gave away 500 backpacks filed with school supplies."
The new approach has helped membership grow primarily by word of mouth, which Williams believes is the most effective way to promote the credit union within the Hispanic community. Unity 1 ensured that its staff interacts well with residents, adding bilingual workers and training employees on the local culture and customs. "One thing you have to be aware of is that the Hispanic population is not homogeneous," Williams said. "In South Florida, it's a Cuban population. Here it is Mexican. There are many differences, and even local differences among a local group. You have to understand what those are."