WEST DES MOINES, Iowa - Three credit unions in Iowa are participating in a pilot program to determine the effectiveness of remittances to attract Hispanic members.
The one-year study led by the Iowa Credit Union League (ICUL) and World Council of Credit Unions (WOCCU) additionally seeks to share best practices for growing CU membership within this emerging segment of the U.S. population.
The $7-million Village Credit Union in Des Moines, the $66-million The Family Credit Union in Davenport, and the $213-million Greater Iowa CU in Ames are taking part in the Credit Union Remittance Outreach Program, or CUROP. The program includes WOCCU’s IRnet offering–a remittance program that’s been in place for more than 10 years–and marketing assistance and financial education to help credit unions reach out to Hispanics.
Megan Webster, research assistant at WOCCU, believes the program can be a “gateway” product to the Hispanic community. “What are we always talking about in credit unions? We’re not getting the membership. But if we’re not finding new segments of the population to serve, how are we going to do that?”
The participating credit unions will be given marketing assistance through ICUL subsidiary Coopera Consulting, which specializes in working with CUs to reach out to new markets, particularly Latin Americans. Programs will include non-traditional efforts, such as partnering with local colleges that offer English classes for Hispanics to promote CU financial education.
Large Opportunity Is Seen
Financial education will be developed by the credit unions, taking their existing programs and adapting them for the Hispanic community with the help of Coopera. The VIGO platform (an international remittance transfer network) will be installed in CUs, and staff will be trained by VIGO on how to run the system.
WOCCU sees CUROP as a large opportunity for credit unions in a state where the Hispanic population grew 100% from 2000 to 2005, according to U.S. census data. “Iowa has a large segment of Hispanics who work at the many meat packing plants across the state...And remittance programs here do not face the competition you see in California, Texas, or New York, where mom and pop remittance shops are everywhere.”
The program kicks off in April and the ICUL and WOCCU will monitor results to determine the effectiveness of the effort to drive membership. “We are taking a wait-and-see approach with the pilot. But if it proves successful, we may look at providing the program to other leagues across the U.S.,” Webster said.
Miriam De Dios, emerging markets director at Coopera, acknowledges that it takes more than a remittance product and effective marketing to serve Hispanics. “Credit unions have to have the infrastructure to receive this market, and that involves looking at hiring practices and processes,” De Dios said, noting CUs must consider whether they have enough bilingual personnel, what their customer identification policies are and whether they will accept alternative forms of identification.
“When we look at the users of remittances, the large majority are first-generation immigrants, many from Latin America. The majority of this segment is unbanked. So this is a huge opportunity for credit unions to grow.”
