Hispanic Resource Center

News Updates...

(updated November 30, 2006)

Targeting the immigrant market has potential

Immigrants’ decisions to use alternative financial service providers for check cashing and remittance services are based on three factors, according to a report from the Federal Reserve system publication “Community Investments.”

First, socioeconomic and demographic characteristics like age, education, ethnicity, and income play roles in immigrant as well as native-born choices regarding financial institution services.

Second, language barriers, intentions to return to their native countries, perspective on the trustworthiness of institutions and legal status shape their financial choices.

Third, the features of the services offered by alternative financial service providers--cost, anonymity, documentation requirements, minimum balance requirements, and convenience--affect their provider choices. Also important is the culture of the institution--how welcoming and familiar it makes itself to immigrants--influences where they do business.

Minimum balance requirements, in particular, are among the biggest obstacles to doing business with mainstream financial institutions. Credit checks and documentation issues--such as requiring a Social Security number even when not required by law--pose barriers to gaining this market’s business.

While remittances are a core service need for the immigrant community, most immigrants and their families use money transfer operators rather than banks and credit unions for such services.

The report notes the importance for small, community banks to serve the growing immigrant market. “On average, community banks finance 40% to 65% of their assets using local and business deposits, compared with about 30% for large banks. As the neighborhoods that many [community banks] serve undergo dramatic demographic changes, small banks have transformed their business strategies to work with new customer bases.”

Steps to reaching this market

Here are some suggested steps to take to tap this market:

First, build trust. Hire bilingual staff and redesign Web sites and ATMs to provide bilingual services.

Second, build relationships with community organizations that already serve this market—churches, schools, and community groups that already serve immigrants.

Third, accept alternative forms of identification to open accounts. Driver’s licenses, consular-issued identification cards, Individual Taxpayer Identification Numbers (ITINs) are often legally acceptable alternatives to Social Security numbers.

Fourth, offer services they need—check cashing, remittances, low-cost checking and savings accounts, and phone cards. Transaction accounts and remittance products are key to getting immigrants to using your services.

Fifth, reach out to children of immigrants. Does your in-school financial literacy program include a special effort for immigrants? It should. By 2020, second generation immigrants will outnumber their parents. Three-quarters of school age children with an immigrant parent are U.S. citizens.

Sixth, offer financial services through the workplace. Immigrants make up 15% of the work force.

Seventh, target immigrant neighborhoods. Today, one in nine residents of the U.S. was born abroad. Can you really afford to ignore this market?

Atlanta group to form state’s first Hispanic credit union.

An Atlanta group is setting into motion plans to launch a Latino-based credit union by July.

The Latino Credit Union Organizing Project wants to charter a credit union in the metro Atlanta area to assist lower-income workers or those who need small loans of less than $1,000 (The Times-Union Nov. 4).

The loans would be targeted to the "unbankable," said Carter Garber, executive director of financial consulting group Ideas. He sees the credit union as a resource for people who may need a car loan to get to their job at a carpet mill.

Garber hopes the credit union will expand to other areas of the state that have an increasing Hispanic population.

Ideas is using North Carolina's Latino Community CU--formerly Cooperativa Comunitaria Latina de Credito--as a guide.

In addition to providing financial stability, the credit union would help protect immigrant workers from becoming victims of violent robberies. Unbanked workers often carry large amounts of cash, making them a target of robbers (News Now).

Latino immigrants send billions home

A new study from the Inter-American Development Bank says the flow of Latin American immigrants’ money home from the U.S. now totals billions a year.

Remittances from the U.S. to Latin America this year will total more than $45 billion, 51% more than the total was a mere two years ago.

The New York Times report also notes that these remittances come from nearly every state--even from places where there were virtually no Latin American immigrants just a few years ago.

About 75% of the Latino immigrants that were surveyed said they send money home regularly, up from 60% in a similar survey in 2004.

The study surveyed 2,500 legal and illegal immigrants.

Hispanics are online, too, take a look

If you are wondering whether converting your Web site to a bilingual tool, consider this information:

There are an estimated 16.7 million Hispanic Internet users in the U.S. And that number is expected to grow to 21 million in the next three years. These numbers come from eMarketer.

A Roper Public Affairs study, commissioned by America Online says that of the U.S. Hispanic Internet users, 40% are English-dominant, 40% are bilingual, and 20% are Spanish-dominant.

Of course, converting your Web site to Spanish is not as simple as it sounds. There are language and cultural nuances that you will want to explore. When Hispanics go online they are very social, so you’ll want your Web site to consider tools that allow for messaging, sharing photos, reading or posting blogs, visiting social networking sites, and talking on the phone through the computer.

A study done by Synovate for AOL Latino in September 2006 says Hispanics believe the “Internet is the best source to make financial purchase decisions about brands and products.”

To know how to set up your Web site, you may want to look at some of the sites Hispanics already are using. Here are some of their most popular sites by Hispanic audience and unique audience, according to Nielsen NetView, 2006:

Esmas, 92% Hispanic audience, 361,000 unique audience…Yahoo Telemundo, 92% and 533,000…Univision.com, 76% and 602,000 …Glitter-Graphics.com, 42% and 490,000… MSN Messenger, 18% and 1,418,000… MySpace, 13% and 6,390,000….

Here are some other sources to learn more about Hispanics and their use of the Internet: “Hispanic Youth Online: Language and Culture Define Usage” from eMarketer … the Internet Advertising Bureau report “Reaching U.S. Hispanics Through Online Marketing”… and “The AOL Latino 2006 Hispanic Cyberstudy.”

Most Hispanics face retirement crisis

Americans are not saving enough money and that statement affects almost all age and income groups. The U.S. savings rate has plummeted to -0.5%.

So what does that mean? Well for one thing people aren’t building up a nest egg for retirement. And the Hispanic community is no exception.

Nearly 71% of Hispanic adults in the U.S. have less than $5,000 saved for retirement outside of Social Security, according to a survey commissioned by the nonprofit Americans for Secure Retirement and The Latino Coalition.

The survey also found that 60% of Hispanic adults work for employers that offer 401(k) plans and 64% of the Hispanic voters say Social Security and retirement pensions will not provide them with enough money for retirement.

Some tips to offer your Hispanic members and potential members:

• Start saving for retirement as early as possible and let the power of compounding interest do its work.
• Open up an IRA (individual retirement account) or other savings vehicle to supplement work-place retirement programs.
• Participate in your workplace 401(k) program if you have one and increase your contribution annually.
• Pay yourself first. Have a portion of your paycheck deposited directly into an IRA. Treat your monthly savings plan as if it were a bill.
• Investigate alternative programs like a lifetime annuity to complement your other savings programs.

Mobile consulate brings in Hispanic members

Yadira Castellanos, teller at First Community CU of Beloit, explains savings and checking accounts to a Latino family during a mobile Mexican consulate visit to Beloit, Wis. The consulate helped immigrants get documentation to be used for identification so they could open savings and checking accounts. (Photo provided by the Wisconsin Credit Union League)

More than 1,000 people turned out for a mobile Mexican consulate team brought to Beloit, Wis., by First Community CU of Beloit and its partner, the Latino Coalition of Beloit.

Yadira Castellanos, teller at First Community CU of Beloit, explains savings and checking accounts to a Latino family during a mobile Mexican consulate visit to Beloit, Wis. The consulate helped immigrants get documentation to be used for identification so they could open savings and checking accounts. (Photo provided by the Wisconsin Credit Union League)

The event over the weekend of Oct. 13-15, helped Hispanic and Latino immigrants get documentation papers, called Matricula Consular, so they could open savings and checking accounts.

"The consulate was supposed to be elsewhere, but they contacted the Latino Coalition of Beloit about a week and a half earlier to say there had been a cancellation, so we jumped in," said Jack Gill, CEO of the $50 million asset credit union. "The turnout was huge."

People came from as far as 50 miles away, even from Harvard, Ill., hoping to obtain documentation. The event was so popular that at 10 a.m. Friday, the consulate "had to close down and tell people in line to come back tomorrow. There was a huge demand," he said. The consular will return next spring, he said.

As a result, the credit union has 35 new members, Gill told News Now.

The credit union offered accounts to eligible members for a minimum of $5. However, many emptied their cash drawers and deposited $100 to $200, Gill said. The average checking balance of Hispanic accounts is $750.

He noted that the group is underserved but not necessarily low-wealth. Traditionally Hispanic and Latinos have money sitting in their houses because they equated financial institutions with the government and didn't trust them in their home countries.

Short takes

Texas CU League President Dick Ensweiler spoke to more than 500 credit union professionals and volunteers at the second annual meeting of Comacrep, the Mexican credit union movement’s equivalent of CUNA. He urged the audience to spread the credit union message because when one credit union succeeds, the whole movement succeeds (CU Times) …

Holiday remittance reminders. Rates to send $200 to Mexico can vary from as little as $2.99 from an online service provider to as much as $15 from Western Union, says Hispanic PR Wire. Some reminders for your Hispanic members: Check the rates, they vary significantly from one vendor to the next. Contact the Better Business Bureau if members have questions about the reputation of a vendor. Find out the remittance provider’s partners in your home country. Are they reputable? Do they have convenient locations for delivery?

(updated September 25, 2006)

CUs reaching out to serve Hispanic market, CUNA survey says

“The good news is credit unions having a significant number of potential Hispanic members are reaching out to serve them.”

That’s the assessment of Jon Haller director of market and corporate research for CUNA, as he summarizes findings of CUNA’s Hispanic Resource Center Advisory Group’s survey of 465 credit unions nationwide.

In 2004, only 6% of credit unions had Hispanic outreach programs in place and another 13% planned to start a program within a year. Two years later, 9% of credit unions have an outreach program in place and another 10% plan to start a program within a year.

While the number of credit unions having a program or in the process of starting a Hispanic outreach program remains largely unchanged from 2004, one of four credit unions with more than $200 million in assets already has an outreach program and up to 15% more are in the process of starting one. That’s the good news—the larger the credit union, the more likely it is to have potential Hispanic members and the more likely it is to have an outreach program.

“We are encouraged that credit unions with significant potential Hispanic members already have outreach programs,” says Danielle Chatfield, chair of CUNA’s Hispanic Outreach Group and chief operating officer at KEMBA Financial CU in Columbus, Ohio. Chatfield notes that two of three credit unions having significant potential (40%+) Hispanic members have a program in place or are in the process of starting one.

Among credit unions with Hispanic programs in place, nine out of 10 believe their programs are serving the needs of the market. A growing number of credit unions serving this market are offering risk-based lending, accepting individual taxpayer identification numbers (ITINs), offering Spanish-language materials, low–cost international remittance services, and nonmember checking services.

Credit union spending to serve this market varies significantly by asset size. For example, credit unions with $10 million to $50 million in assets spend less than $1,500 annually on this market. Meanwhile, large credit unions with more than $500 million in assets are spending an average of more than $100,000 a year.

And credit unions that are reaching out to serve Hispanics are hiring bilingual employees to help solidify that outreach relationship. One of five credit unions serving Hispanics has a full-time employee that speaks Spanish. Among large credit unions, that average ranges from nearly 10 bilingual employees at $500 million credit unions to more than 20 at $1 billion credit unions.

“It’s important to note that nearly half the credit unions with Hispanic outreach programs have been tapping into this market for six years or more,” notes Chatfield. “Serving the Hispanic market has received a lot of press in recent years, but it is good to note that many credit unions (55%) with programs are not new to the business—they’ve been serving Hispanics for half a dozen years or more.”

That explains why some credit unions, like North Island Credit Union in San Diego, have completely bilingual Web pages, as well as fully translated printed materials, and culturally sensitive promotional campaigns. There’s absolutely no question when a potential Hispanic member visits the Web site or the credit union, that he or she is valued as a potential member.

But there are clearly credit unions that aren’t reaching out to serve Hispanics. In fact, while one of three credit unions think it is important to serve this market, half the respondents to this survey did not say it was important to target this market. That was a significant increase from 2004, but rather than representing some sort of political statement, it more likely represents the change in respondents to the survey, as well as the homework credit unions did before responding.

“We had a higher response rate in this survey (than in 2004) from credit unions having a very small Hispanic portion of their potential membership,” notes Haller. In 2004, less than half the credit unions responding to the CUNA questions had less than 5% of their potential membership being of Hispanic origin. This time the nearly 60% said that was the case.

“It is important to keep in mind that a credit union’s current perception could change should its local representation of Hispanics increase in the future,” Haller says. As the Hispanic community grows and relocates in this country, migrating away from the border states, that response could change.

A grant from the National Credit Union Foundation helped CUNA conduct the research.

How Hispanic household income distribution is changing

For the most part. growth in U.S. Hispanic household income has kept pace with other ethnic groups over the past 30 plus years, according to data compiled from the U.S. Census Bureau and other government reports.

Additionally, the Pew Hispanic Center has released its mid-decade report, using Census Bureau data. It is considered by many observers to be the most up-to-date compilation of statistics on the Latino population in the U.S.

The report is based on the Pew Hispanic Center’s tabulations of the 2005 American Community Survey. The statistical portrait includes 32 tables on the social, economic, and housing characteristics of Hispanics and other demographic groups, with comparisons to the 2000 Census.

Remittances seen as a key to serving market

Ask just about anyone actively trying to serve the Hispanic market and a remittance program is key.

Financial institutions have hired bilingual tellers, relaxed lending rules, and even distributed free financial literacy materials--in one case in the style of a Spanish soap opera--in their attempt to attract the Hispanic market.

But the push many think that will be most successful is a remittance program. Some financial institutions are even doing it for free, provided senders open an account. Worldwide remittances to Latin America and the Caribbean rose to more than $53.6 billion in 2005, according to the Inter-American Development Bank. About 75% of the total comes from the U.S.

Still, getting Hispanics to open an account is a challenge. Palmetto Trust Federal Credit Union, Columbia, S.C., began offering free check cashing to attract this market. While check cashing is a key service for Hispanics--and about 34% of Hispanics are unbanked--Palmetto is like many financial institutions, it is struggling to earn the market’s trust.

Among the issues credit unions and other providers have to overcome: Many won’t open an account because they do not have proper documentation and they fear being reported to authorities … some don’t have enough money to save … minimum balance requirements may be too high for many in this market.

CUs respond to rise in remittances to Latin America

The growing use of remittances between the U.S. and Latin American and Caribbean countries is an opportunity for credit unions to create financial relationships with the unbanked Hispanic population, Texas credit unions were told recently.

According to a recent Federal Deposit Insurance Corp. report, more than 40 million Hispanics live in the U.S., 62.7% of whom are of Mexican descent. Nearly 20 million of them do not have checking accounts.

This market is a huge opportunity for credit unions, said Lois Kitsch, director of field projects, Filene Research Institute, at the Texas Credit Union League's Leadership Conference & Solutions Expo (LoneStar Leaguer Sept. 12).

She noted that Hispanics are the fast-growing population in the U.S. and are largely unbanked.

"A lot of people who are not banked, still have money," Kitsch told attendees. "They just need opportunity ... access to a financial institution."

Credit unions need the right mix of products and services for this market--such as remittances, check cashing, money orders and payday loans, among others, she said.

The global remittance market is estimated to grow to $345 billion in 2008 from $256 billion in 2005, according to research and consulting firm Celent. Latin America and the Caribbean receive 30% of international transfers--the highest amount for any region.

About 60 credit unions in Texas offer the World Council of Credit Unions Inc.'s IRnet, a money transfer service for credit unions.

Other products and services credit unions are offering:

• Prospera CU, Appleton, Wis., set up a financial service center in a Goodwill store to provide payday alternative loans and financial education programs.
• ACCESO, a credit union service organization in Washington, offers financial services, products and education designed to meet the needs of Hispanic and Caribbean immigrants in D.C.'s Ward One.
• Mario N. Galarraga, WOCCU project manager, is working with Caja Popular Mexicana (CPM) in Mexico, which is targeting the unbanked population. In August, CPM received 23,785 remittances worth nearly $10 million, although few came from U.S. credit unions. CPM is launching a program that links loans to savings, Galarraga said. It will count remittances as part of a member's salary when examining debt-to-income ratio. The member must save 35% of the remittance each month.

Source: CUNA’s News Now

CUs help Latinos hoodwinked by scams

When White River CU reached out to a Latino woman hoodwinked by a predatory lender, it illustrated the vital role that credit unions can play in helping Latinos targeted by scams.

Teresa Belmont, a single mother of four who works two jobs, had agreed to buy a used Chevy van at 15% interest. The Spanish-speaking car salesman convinced Belmont that the high interest rate was the best deal available to a Mexican immigrant with little credit history.

The dealership later insisted that Belmont return to sign a second set of paperwork or risk having the van repossessed (The Seattle Times Sept. 10).

A year later, Belmont heard White River CU CEO Linda Kleppe-Olson talking about credit unions' outreach to Latinos on a Spanish-language radio program.

After Belmont brought her papers to the credit union, Kleppe-Olson called the dealership and learned that signing the second set of papers had almost doubled Belmont's interest rate. Despite a down payment of $2,500 on the $9,000 van, Belmont's 29% interest-rate loan would have forced her to pay more than $16,000.

Kleppe-Olson helped Belmont close out the predatory loan and replace it with a credit union loan at 8.2% interest. Today, the van is almost paid off.

Experts say lack of access to mainstream financial services often forces immigrants to pay too much for wiring money, getting money orders, cashing checks or obtaining credit.

The State Attorney General's Office is holding meetings Oct. 3 and Oct. 20 to help providers and community organizations brainstorm about how to help Hispanic residents protect themselves.

The Washington Credit Union League has made a special effort to offer information about credit union services to the state's Latino residents, who make up nearly 9% of the population.

Source: CUNA’s News Now

(updated August 4, 2006)

It’s all about the relationship, Filene Research report suggests

Creating relationships with community organizations that have strong ties to the local Latino population can help credit unions reach the growing Latino market, according to a new Filene Research Study.

Professor Bárbara Robles of Arizona State University's College of Public Programs authored the new Filene report, "Asset Accumulation and Economic Development in Latino Communities: A National and Border Economy Profile of Latino Families."

The study identifies the financial needs of Latino families, including:

• Nearly half depend on family assistance in financial emergencies.
• One-fourth send money to relatives not currently living with them.
• One-third want more information about buying a home.
• Use of tax refund anticipation (RAL) loans is widespread and varied.
• More than one-quarter are unbanked.

Robles' study is based on in-depth behavioral surveys with more than 2,000 families in the Borderlands states of California, Arizona, New Mexico and Texas. Information also was gathered from 7,000 tax returns.

The Borderlands area provides a demographic microcosm of other high-density Latino populations in the U. S., according to the Filene report. Latinos who live in Borderlands states are typically foreign-born, unbanked and poor.

They may be isolated from the community at large and are likely to be deficient in formal educational achievement. They generally live in multi-generational family and non-family situations (News Now).

“La Oportunidad” highlights complex needs of Latino community

Contrary to perception, nearly half of all Hispanics are U.S. citizens, being either born in the United States or descended from foreign-born immigrants and unauthorized immigrants.

That’s one of the insights from a new Filene Research Institute special report. Published in tandem with the Robles study, "La Oportunidad" provides data that shows the growing Latino population has financial needs that are becoming more acute, complex, and underserved.

Some insights from the special report:

• By 2010, 40% of all first-time homeowners in the U.S. will be Latinos, according to the Hispanic Real Estate Professionals Association.
• Hispanics will account for 13% of new car buyers by 2020.
• The number of Hispanic college graduates is now nearly 4.5 million, including 1.3 million with advanced degrees.
• One in every 20 U.S. companies is owned by a Hispanic business person. Most of these (85%) are sole proprietorships and account for 6% of the nonfarm business in the United States.
• Hispanics’ financial sophistication is growing—37.5% of the readers of Hispanic Business contacted a brokerage firm in 2002 and 55% of those individuals used a tax preparation service and 30% a financial planner.
• Discrimination and cultural aversion play a part in the lack of credit history among Hispanics. Six of 10 Hispanics reported they were discriminated against in the 2002 National Survey of Latinos by the Pew Hispanic Center.
• A report by the Minority Business Development Agency and the Milken Institute says Hispanic business owners pay nearly 70% more for lines of credit in heavily concentrated markets.
• Though the potential for remittance business in traditional financial institutions is huge, banks and credit unions accounted for just 3% of remittance transactions in 2004.

Hispanics and their use of bank services

The Average hispanic bank customer goes into a branch nearly four times a month, according to Information From Synergistics Research Corp., In Atlanta, And first reported in American Banker Online.

Surprisingly, no single delivery channel—branch, 27%; phone, 29%; ATM, 21%; online, 16%; other, 6%; don’t know, 1%--dominates the delivery channel options that the hispanic market uses.

Spanish-Language Brochures and spanish signage rank as the two most important branch office features. And 65% OF respondents said they use branches with spanish speaking employees.

Hispanics use automated teller machines five times a month on average. HAlf the hispanic consumers who cash checks at bank branches say they did not have a relationship with the institution.

There are more than 40 million Latinos currently in the United States and that figure is expected to exceed 100 million by 2050.

Pew Hispanic Center releases 2006 National Survey of Latinos

Latinos are feeling more discriminated against, politically energized, and unified following the immigration policy debate this past spring.

That’s one finding from the 2006 National Survey of Latinos conducted by the Pew Hispanic Center.

While the survey shows Latinos are holding the Republican Party responsible for the immigration debate, the survey provides little solace for the Democratic Party, which showed now significant gains among Hispanic voters. “If anything,” the report says, “the survey shows a growing number of Latinos are dissatisfied with both political parties.”

Hispanic auto market blossoms

Just as the Hispanic market is changing the demographics of the workforce, it is changing the face of car buying, too.

J.D. Power projects Hispanic auto sales will grow 29% by 2010. And they’re not just buying used cars. New vehicle sales to U.S. Hispanics increased 10% between 2000 and 2005. Out west, sales to Hispanics jumped 16%. In that same time span, sales to non-Hispanics fell 13%.

In 2005 U.S. Hispanics spent more than $6.2 billion on trucks priced between $30,000 and $50,000.

Credit unions that have served this market say it is not uncommon for Hispanic borrowers to have large down payments; to focus on monthly payments; to have little information about credit ratings and credit history; and to rely on co-signers to qualify for a loan.

Consider the personal touch for Hispanic small businesses

It’s generally believed that the Hispanic community relates well to business providers that offer a sense of community.

That’s one reason why credit unions and their member ownership should be a good selling point when recruiting the Hispanic market.

Now there’s evidence that designating a relationship manager to serve Hispanic small businesses may be helpful in reaching out to this market. Synergistics Research Corp. recently conducted a national study that found only three of 10 Hispanic small business owners had a relationship manager at their financial institution. That’s more than 20 percentage points lower than what the banking world is providing for other small businesses it serves.

Many credit unions are already serving small Hispanic-owned businesses. For example, the Los Angeles Times recently reported that North Island CU in San Diego made it possible for Nancy Estolano to buy a new building for her business after a bank turned down her application for a commercial real estate loan.

Estolano and her husband, Mario, own San Diego Leather, a manufacturing and retail business with 20 employees. Several years ago, Estolano wanted to buy two older buildings that could provide 40,000 square feet of space for the business at a highly visible location. The 30-year-old business had been renting 5,000 square feet of space.

Her bank turned her down because both buildings included in the deal were older structures. But North Island CU gave her the loan and today handles all her business banking needs. Member business lending by California credit unions reached $5.8 billion in 2005, almost triple the level recorded three years earlier, according to Credit Union National Association (CUNA) figures.

With the number of Hispanic owned businesses expected to increase 55% over the next six years and revenues by this market expected to jump 70%, there’s a real opportunity available and offering a personal touch from your credit union may help you capture this market.

Synergistics’ study, “Financial Insights: Hispanic Small Business Owners” took a look at 600 Hispanic small business owners with annual sales from $100,000 to $5 million.

Hispanics know little about college financial aid

Credit unions looking to serve college bound Hispanics would be wise to focus some attention on educating the market about financial aid.

According to a survey of 400 Hispanics between the ages of 18 and 24, Hispanic students are under informed about financial aid. The Tomas Rivera Policy Institute, a nonprofit research organization with headquarters at the University of Southern California, conducted the survey.

Hispanics have a lack of knowledge about financial aid, including eligibility for grants such as the federal Pell Grant. More than half of the survey’s respondents mistakenly believed citizenship is required for college financial aid.

Nearly all respondents believe a college education is important, but only 62% believe the benefits of a college education outweigh the costs.

Hispanic investors being overlooked

Hispanics might represent the next growth market for investment companies. About 9% of Hispanic households owned stocks or mutual funds, compared with 35% of non-Hispanic white and 12% of African American households.

With disposable income for the Hispanic market expected to increase to $1 trillion (9%) by 2009, investment companies are taking notice. With the number of Hispanic owned businesses growing, more Hispanic entrepreneurs will be deciding whether to offer 401(k) programs and how to invest their profits.

Look for more investment companies to target this market. The Boston-based Celent Communications firm’s report notes that firms that move fast to target this market will likely reap the benefits as Hispanics tend to be more loyal than other demographic groups.

Already some firms like T. Rowe Price, Wachovia Corp, Citigroup, Sovereign Bancorp have announced plans to target this demographic group for investment products. Because there are few Hispanic financial advisers, look for asset management groups to form alliances to better reach this market.

Latino Community CU links to BANSEFI

Strengthening the remittance network, Latino Community CU will be linked to BANSEFI--one of the largest banks in Mexico--through the Directo a Mexico program.

The Durham, N.C., credit union recently started to provide the service, which charges a flat $3 fee, regardless of the amount that is transferred, and offers the same exchange rate as the Federal Reserve.

The credit union hopes the program will change the face of the remittance industry in the U.S. The Federal Reserve Bank and Banco de Mexico created the low-cost remittance program.

To use the service, consumers must have an account with Latino Community CU and a savings account at one of BANSEFI's banks. Members can open accounts at BANSEFI at any of the credit union's five branches.

The difference between the Directo a Mexico program and traditional remittances is the emphasis on savings. Traditional remittances are cash-to-cash transactions.

Directo a Mexico transfers money from account-to-account, helping members start relationships with financial institutions and begin building wealth, said Elizabeth McQuerry, assistant vice president of the retail payment office of the Federal Reserve.

Earlier this year, Southwest Corporate FCU became the first corporate credit union to help U.S. credit unions get involved in the program.

It added an international screen to its automated clearinghouse (ACH) origination service to accommodate the Directo a Mexico transfers (News Now).

Wisconsin CUs reach out to Hispanic market

Seventeen representatives of Wisconsin credit unions met last week with officials from Centro Hispano, a community organization serving the Hispanic/Latino community, to discuss better serving the Hispanic/Latino community (News Now).

Centro Hispano Executive Director Peter Munoz, right, shows representatives of Wisconsin credit unions and Wisconsin Credit Union League Centro Hispano's building in Madison, Wis., and provides an overview of the organization during a REAL Solutions/league-initiated meeting last week. (Photo provided by the Wisconsin Credit Union League)

Centro Hispano Executive Director Peter Munoz, right, shows representatives of Wisconsin credit unions and Wisconsin Credit Union League Centro Hispano's building in Madison, Wis., and provides an overview of the organization during a REAL Solutions/league-initiated meeting last week. (Photo provided by the Wisconsin Credit Union League)

The July 26 meeting was initiated by the Wisconsin Credit Union League as part of its statewide REAL Solutions initiatives to help get credit union services to the underserved and unbanked.

The July 26 meeting was initiated by the Wisconsin Credit Union League as part of its statewide REAL Solutions initiatives to help get credit union services to the underserved and unbanked.

Centro Hispano Executive Director Peter Munoz and Assistant Director Kent Craig hosted the group, comprised of representatives from Fort Community CU, County City CU, First American CU, Dane County CU, Madison CU, First Community CU of Beloit, Great Wisconsin CU, Heartland CU, and UW CU.

Munoz and Craig provided an overview of Centro Hispano's work and said it aims to provide services that strengthen the community and encourages employment, higher education and self- sufficiency.

League Vice President League Operations Jim Drogue updated the group on the REAL Solutions initiative, saying improved outreach to the Hispanic/Latino community is a priority for the initiative. He noted that the program will experience a nationwide push when the National Credit Union Foundation assumes management of the REAL Solutions program, which was started by the Filene Research Institute.

The group discussed opportunities for the future involving credit union chapters assisting Centro Hispano or its clients. For example, credit unions can:

• Provide education. Although the Wisconsin Housing and Economic Development Authority is the main provider at this time, credit unions can add content covering financial matters to English as a Second Language classes.
• Volunteer with VITA programs to assist individuals with tax filing, acquiring individual tax identification numbers and opening new accounts, and offer financial education.
• Assist with staff training of Centro's support staff to make them aware of credit unions' financial resources and to help them expand their financial knowledge.
• Expand financial curriculum in schools through the National Endowment of Financial Education's High School Planning Program available in Spanish and through Asset Builders.
• Provide financial support to help Centro services become available in other cities, help fund travel to bring clients from outlying areas to immigration meetings where Centro assists in documentation.
• Provide office space and meeting rooms to help facilitate service coordination to Latinos.
• Share the credit union's bilingual staff, who can provide manpower for certain activities.

Credit unions in the Beloit area also are taking initiative on outreach, said the league.

Drogue has established chapter liaisons from the two chapters represented to continue to meet with Munoz to establish opportunities for credit unions to work together to help Centro Hispano.

Madison Chapter representatives are Jennifer Armaza Meneses, Heartland CU; Mary Rescorla, Dane County CU; Jon Lowery, Dane County CU; Mancy Shimeall, Madison CU; and Melissa Strom, UW CU.

South Central Chapter liaisons are Danielle Storck, Fort Community CU, and Ariel Bilskey, First American CU (News Now).

Memphis Area Teachers CU offers Spanish language ATM

Memphis Area Teachers' CU (MATCU) has placed a Spanish-language ATM in El Mercadito, the city's first fully Hispanic-owned marketplace.

The owners of El Mercadito decided to provide access to MATCU's Spanish-language ATM because of the credit union's Hispanic-friendly culture and affordable financial products.

El Mercadito, which contains more than 50 individual businesses, specializes in Mexican imports.

Monica Henao, MATCU's director of Hispanic operations, said placing a Spanish-language ATM in an environment focused on Hispanic culture is "a huge step for MATCU to build trust in the Hispanic community."

MATCU formed its Hispanic Operations Department in 2004 to better serve Hispanic and Latino residents. MATCU has since reformatted brochures, telephone options and ATMs to provide Spanish language options. Henao said the credit union strives to serve "unbanked" members of the Hispanic community in their native language while helping them understand that their money is secure (News Now).

Space City CU gets Juntos Avanzamos designation

The Juntos Avanzamos flag will soon fly over Space City CU, Houston, since the credit union made its commitment to the "Together We Advance" program from the Texas Credit Union League.

Credit unions that commit to serving the long-term needs of the Hispanic community are designated by a special flag that flies outside their buildings. The flag signifies that the credit union offers friendly, affordable financial services and provides a "hand up" to Hispanic community members (LoneStar Leaguer July 27).

Juan Hernandez, a former cabinet member in the Mexican government, presented Space City President/CEO Craig Rohden with the flag on behalf of the league.

Other Texas credit unions that are part of the Juntos Avanzamos program are: DATCU, Denton; First Central CU, Waco; Neighborhood CU, Dallas; Plus 4 CU, Houston; San Antonio City Employees FCU; Unity One FCU, Fort Worth; Velocity CU, Austin; and West Texas CU, El Paso.

Other Hispanic news items…

First American Bank Corp., a Chicago-area bank that federal prosecutors said illegally avoided doing business in minority areas, has agreed to settle a federal discrimination lawsuit by investing almost $6 million in predominately black and Hispanic neighborhoods (Dow Jones Newswires July 14). The suit alleged that the bank engaged in a practice called redlining, by denying blacks and Hispanics banking services in an around Chicago and Kankakee, Ill. By 2009, First American must invest $5 million in a program to offer consumers and small businesses in minority areas subsidized interest rates that are at least half a percentage point lower than what it would normally charge. U.S. Attorney Patrick Fitzgerald said that program would provide about $80 million worth of extra loans in the areas. The bank must also spend at least $400,000 to advertise its services in the areas, and another $300,000 on consumer education. And it must open three branches in predominately black areas this year, and a fourth branch in a predominately Hispanic area within three years ...

Hispanics and blacks are now uninsured at a rate as much as three times higher than whites. According to the Commonwealth Fund Biennial Health Insurance Survey, almost two-thirds of working- age Hispanics and one-third of African Americans were uninsured at some point during 2005, compared with 20% of working whites. Only 34% of working-age Hispanics had employer-sponsored health coverage last year, the lowest among all racial demographics. Working age is regarded as 19 to 64. The Commonwealth Fund is a private foundation that undertakes independent research on health care issues…

U.S. Bank held a Latinos Unidos Multicultural Block Party in Wausau, Wis., that gave Hispanics a chance to obtain proper identification and to speak with community business representatives. More than 240 Hispanics registered to participate and an estimated 400 people stopped by at the six-hour event. The Mobile Mexican Consulate from St. Paul, Minn., came to help issue IDs and passports….

(updated July 6, 2006)

CUNA, Federation pledge cooperation on Latino outreach

CUNA and the National Federation of Community Development CUs agreed last month to work more closely in their Hispanic/Latino outreach efforts.

At the 4th Latino Conference, CUNA Chairman Juri Valdov and the chair of CUNA’s Hispanic Resource Center, Danielle Chatfield, joined Rita Haynes, chair of the National Federation of CDCUs and Pablo DeFilippi, co-chair of the Federation’s Latino CU Task Force, in signing a joint resolution to work more closely together in assisting credit unions serving the Latino market.

The two organizations plan to hold regular communication sessions, to share CUNA’s Hispanic Resource Center services, and to share appropriate reports such as coverage from the Federation’s Latino CU Conference: Honor Our Heritage & Focus on the Future, which is located in File Resource Library.

In addition to the joint resolution, the Federation’s Latino Conference provided an opportunity to showcase an outreach effort to start a network of Hispanic professionals.

Carlos Calderon, OAS Staff FCU; Luis Pastor, Self-Help CU; Maria Martinez, Border Federal CU; and Carla Decker, District Government Employees FCU, and others hope to develop an organization they are calling the National Association of Latino CU Professionals.

Membership would be open to any individual of any rank within the credit union. The vision is to promote an understanding of Latinos’ financial needs and to strengthen their bond with the credit union system. Part of that mission includes sponsoring and helping develop Latino leadership in credit unions. For more information contact, latinnetwork@oas.org.

Minorities more likely to suffer ID theft, study says

Hispanics and African-Americans have a significantly higher chance of becoming victims of identity fraud.

Bank Technology News reports Hispanics and African Americans together account for 35% or $20 billion of total annual identity theft losses.

“The Demographics of ID Fraud,” published by Javelin Strategy & Research, interviewed 5,000 consumers with a 44-question telephone survey about identity fraud. About 10% of the survey respondents were actually victims of identity fraud.

The results show identity fraud affects the youngest adults, households with the lowest incomes, and certain minorities (i.e., Hispanics and African-Americans) the most. Whether due to lack of knowledge or lack of resources, these demographic groups appear to be easier targets for fraud operators.

Identity fraud, victimizing almost nine million U.S. adults in the past year, represents $56.6 billion in annual losses for financial institutions and retailers. While growing consumer awareness and improved company prevention and detection measures have curtailed an increase in the number of identity fraud victims, losses from identity fraud have increased 22% over the past two years, averaging $6,383 per victim.

As income increases, the source for security breaches is more likely to shift from consumers to outside agencies. Among minorities and lower income individuals, it typically takes longer to detect that fraud has occurred. As a result, those groups are likely to suffer higher average losses when their identities are stolen, the report says.

Duke invests $5 million in Latino CU

Duke University has committed to deposit up to $5 million in the Latino Community CU over the next five years.

The investment will guarantee affordable financial services for low-income individuals in Durham, N.C., who find it difficult to obtain loans and mortgages through conventional lending sources because of a lack of credit history.

The money could provide for funding as many as 50 mortgages. The credit union will dedicate the funs for low-income consumer and mortgage lending in Durham County, home to more than half of Duke’s work force.

Latino CU is one of the fastest growing credit unions in the country, having made more than 7,800 consumer loans for $32.4 million in just six years of operation. Three out of every four borrowers at the credit union had no credit history when they received their first loan from the credit union.

North Carolina’s Hispanic population totaled about 7% of the state’s population in 2004. The average Hispanic household earns about $32,000 annually, according to researchers at the University of North Carolina at Chapel Hill.

Hispanic youth market worth targeting

Hispanics represent about 10% of the 10-to-19 age group in the U.S. today, about 10% of the 42 million total.

That might not seem too significant until you realize that Hispanics in this age group are increasing at six times the rate of the overall age group.

The fact is young people in the 10-to-19 age group actually outnumber the 65-plus age group: 42 million vs. 37 million. And these young people are spending around $120 billion annually.

Observers who have been doing some number crunching report that young people are adopting adult-like behaviors—like investing--at increasingly early ages. Merrill Lynch economist David Rosenberg told Kiplinger News that the median income among 12 year olds is $1,500 and among 17 year olds it is $4,500.

The U.S. has far more young people than other developed nations, Kiplinger says.

Odds and ends…

About 45% of the reconstruction workers in New Orleans are Hispanic and at least two-thirds of these workers arrived after Hurricane Katrina. According to a study by professors at Tulane University and the University of California, Berkeley, one quarter of the construction workers rebuilding New Orleans are illegal immigrants. They report making an average wage of $6.50 an hour less than legal workers. The study estimates Hispanics now make up about 8% of the city’s population…

Offering training courses for Hispanics that teach basic money management skills is one way financial institutions are tapping into this market. Completing a budgeting and home buying course is often a prerequisite to getting a home loan for some low-income consumers. US Bank offers such a program for its Rockford, Wis., borrowers…

In Los Angeles, a group of wealthy Latino investors is planning to launch Promerica Bank, the first Latino Bank in more than 35 years in California. There are 40 Asian banks operating in California…

In addition to identity theft, many Hispanic people fall prey to “immigration consultants” or “notarios”—nonlawyers who, whether or not they are qualified to do so, are in the business of helping aliens negotiate the immigration system. What is happening in some communities is local “consultants” are asking undocumented individuals for money to start processing people—even though there is no new immigration law. Texas and California have shut down dozens of immigration consultant operations in recent years…

Sallie Mae and USA Funds will unveil 2Futuro, a new college-financing outreach program for Hispanic students and their parents this week. 2Futuro is a fully bilingual college-financing and outreach program…

(updated June 5, 2006)

CUNA E-Scan: Hispanics represent big small business market

The number of Hispanic/Latino-owned small businesses in the U.S. is expected to increase 45% between 2005 and 2010—from 2.2 million to 3.2 million, according to CUNA’s 2006-2007 Environmental Scan.

These businesses will account for more than $465 billion in total revenues.

Citing data from the Pew Hispanic Center and the U.S. Census Bureau, the E-Scan reports that the nation’s largest ethnic group is expected to reach 47.7 million people by 2010 and 60 million by 2020. Births to Hispanic immigrants (as opposed to immigration) will become the primary driver of the population growth. Births will account for 36% of the growth by 2020, while immigration will account for only 34% of the growth.

Credit unions need to stay abreast of local immigration trends, the E-Scan says, as pockets of highly concentrated Hispanic/Latino populations in large cities outside of “magnate” states like Texas, California, New York, and Florida will continue.

And credit unions will need to devise an Internet strategy to reach the Hispanic market. There were nearly 16 million Hispanics using the Internet in 2005, a 14% increase in two years. That growth rate is more than twice the growth rate for the general population. In fact, 54% of online Hispanics look for financial information online (similar to 56% of the general population) and 70% of this group say the Internet is their best source of price-comparison shopping.

Finally, the E-Scan suggests marketers may soon need to think about targeting second generation Hispanics. According to a Filene Research Institute study, role reversal is a fairly common phenomenon among first- and second-generation immigrants. That means second generation Hispanics will be heavily relied upon to make key family decisions.

Copies of CUNA’s 2006-2007 Environmental Scan are available at buy.cuna.org/detail.php?sku=27243.

South Leads U.S. in Fastest Hispanic Growth

States with small Hispanic populations have shown the greatest growth in the last decade—with seven of the 10 fastest-growing states in the South.

In the coming decades, the geographic dispersion of the U.S. Hispanic population should continue. In addition, as the demographics shift from immigrant to native-born, and from young to mature, Hispanic consumers are expected to become a more attractive market and represent a larger share of every consumer segment in the U.S. economy.

For more in-depth information, see, The U.S. Hispanic Economy in Transition: Facts, Figures, and Trends" – 2005 Edition or download a sample Hispanic Economy 2005 Table Content and Sample Pages.pdf

Bill would help Carolina CUs lend to Latinos

Following the success of a state appropriation bill last year, the North Carolina Minority Support Center is working on a similar bill this year to provide funding to two North Carolina credit unions that serve Latino and low-income communities.

Senate Bill 1518 would provide funding in two ways:

1. Three million dollars to the minority support center, which would then be split into $1.5 million each to go to Latino Community CU and Generations Community CU, both of Durham, N.C.
2. Ten million dollars to the minority support center, which then would help the credit unions make $100 million in loans and financial service expansion, based on market demands, to low-income and unbanked communities.

"The state legislature really sees that Latino Community CU, Generations Community CU, and the North Carolina Minority Support Center do a great job reaching out to low-income people," said John Radebaugh, president/CEO, North Carolina Credit Union League. "It trusts the credit unions to get people into homes who otherwise wouldn't be able to purchase them."

Last year, the general assembly allocated $2.5 million to the North Carolina Minority Support Center to develop mortgage programs at the two community development credit unions (source: CUNA News Now).

Three more Texas CUs earn Juntos Avanzamos designations

A "Juntos Avanzamos" flag now flies in front of DATCU Credit Union (Denton), Plus4 Credit Union (Houston) and Unity One Federal Credit Union (Fort Worth).

The Texas Credit Union League (TCUL) awarded the designation at each of the credit unions, at ceremonies attended by credit union officials, local community leaders, and members of the city government in each of the respective cities. The designation signifies that the credit unions have a long-term vision and commitment to serving the needs of the Hispanic market. At the same time, this designation lets the Hispanic community know that they can receive friendly, affordable financial services at this "capacity to serve" or "Juntos Avanzamos" (together we advance) institution.

Vladamir Stark, CEO of Plus4 CU, says its goal is to be the Hispanic community’s "bridge to financial independence." And Unity One FCU CEO Gary Williams assures his credit union is committed to serving this market and is here to stay.

"Credit unions are an integral part of our communities. We are helping families buy their first home, send their children off to college, and plan for their future," noted Texas Credit Union League Board of Director Pamela Stephens.

A program of TCUL, Juntos Avanzamos seeks to empower Texas credit unions to serve their Hispanic market more effectively. Credit unions must complete an extensive application, requiring information about what products and services the credit union offers to specifically address the needs of this market, as well as what the strategies are for serving this demographic group.

Claudia Velasco of the Mexican Consulate's office in Dallas expressed her gratitude toward Texas credit unions that are opening their doors to the Hispanic community--a segment of the population that she says is growing not only in size, but also in economic influence. Representatives from the Caja Popular Mexicana, the largest credit union in Mexico, attended all three ceremonies.

Soon more advertisers will use English to reach Hispanic market

Advertisers spent more than $3.3 billion to market products to U.S. Hispanics in 2005, a 6.8% increase from 2004, according to HispanTelligence®, the research division of Hispanic Business Inc.

While traditionally Spanish-language advertising was used to reach Hispanics, new data indicate second- and third-generation Hispanics tend to favor English. As a result, advertising-spending growth in some sectors of the U.S. Hispanic market could slow as advertisers debate which Hispanic demographic to target.

The U.S. Hispanic Media Market: Projections to 2010 report highlights the latest research on the top advertisers in the Hispanic market, purchasing power by language preference, and top Hispanic ad agencies, as well as trends in radio, television, print, and Internet advertising to reach Hispanics. The report can be purchased online at U.S. Hispanic Media Market: Projections to 2010.

Do minorities pay more for mortgages?

A study done by the Center for Responsible Lending says black and Hispanic families are paying more for subprime mortgages than whites with similar credit ratings.

But the mortgage banking industry says the Center’s report, released in late May, does not take into account legitimate questions about family wealth, debt load, house appraisal, down payments, and other factors that underwriters must consider when making a loan.

As many as one of five home loans are now subprime, totaling more than $500 billion a year, says the Washington, D.C., Center for Responsible Lending. Subprime borrowers often pay as much as two percentage points or more than conventional loan borrowers.

According to the Center for Responsible Lending, blacks and Hispanics were 30% more likely than whites to pay a higher mortgage interest rate. Meanwhile the mortgage industry says the varied financial backgrounds of borrowers and a tendency for minority borrowers to put less down on a home are the more likely reasons for the interest rate disparities.

Doug Douglas, chief economist for the Mortgage Bankers Association of America told the New York Times that the Center’s study failed to capture the complexity of mortgage underwriting ( New York Times, June 1, 2006).

A number of credit unions across the country have taken a step toward making mortgage loans more affordable for member with a mortgage program called HLPR (helper). Learn more about the below-market rate mortgage program go to www.cuna.org/initiatives/hlpr/.

First generation Hispanics most optimistic about their future

New research from the Pew Research Center suggests an adult Latino in the U.S. is probably employed, probably religious, probably getting by without much money or education and probably—optimistic.

Hispanics in general and Hispanic immigrants in particular are more inclined than blacks or whites to take an upbeat view of things. More than four of 10 (44%) Hispanic adults say today’s Hispanic children in this country will grow up to be better off than Hispanics are now. By contrast just 33% of both whites and blacks hold this view.

Hispanics’ optimism is remarkable considering they earn, on average, only about two-thirds the weekly pay of non-Hispanics and have less education than non-Hispanics. Latinos’ optimism about the future is inversely related to the length of time they or their families have been in this country. More than three-quarters believe their children will end up with a better education and better paying jobs. This exuberance, however, falls off among second- and third-generation Hispanics (Source: Pew Research Center).

(updated March 30, 2006)

NFCDCU hosts fourth annual Latino CU Conference

NCUA Board Member Gigi Hyland and U.S. Treasurer Anna Cabral are among the key speakers at the 4th Latino CU Conference June 7 and 8 in Durham, N.C., sponsored by the National Federation of Community Development CUs (NFCDCU).

The two-day conference, which operates under the theme “Honoring our heritage, focusing on the future,” precedes NFCDCU’s annual meeting. Organizers of the event hope the two-day Latino gathering will help awaken the movement to the potential the Hispanic market offers.

Among the topics being covered at the two day gathering: lending, financial education resources for Latinos, market analysis and demographics, recruiting and developing Latino leaders, community outreach and marketing, Latino public policy challenges, Latino CDCU models, international partnerships, and compliance.

For registration or more information about the conference and NFCDCU’s annual meeting.

Hispanic-owned businesses expanding rapidly

The number of Hispanic-owned businesses grew at three times the national average for all companies between 1997 and 2002, the Census Bureau reported recently.

Hispanics owned nearly 1.6 million businesses in 2002, a 31% increase from five years earlier. Hispanic consumers spend $700 billion a year and will spend $1 trillion by the end of the decade.

Census Bureau data show that only 13% of Hispanic-owned businesses have more than one employee. Hispanics own 7% of all businesses.

Self Help CU, Durham, N.C., has witnessed this trend first-hand. The credit union makes loans to Hispanic-owned companies in its field of membership, and Latino businesses in North Carolina have increased 24% during the same time frame as the Census Bureau study.

Slowdown in mortgage market sheds light on immigrant market

Banks see the Latino market as its next great target, says a report in the Los Angeles Times.

As the mortgage market slows, bankers are going to focus more of their marketing attention on the nation’s new Latino immigrants and the $1 trillion in disposable income this market will have by 2010.

Bank of America (BofA), for example, reported at a recent FDIC conference that it has10 million unbanked Hispanics living in the bank’s geographic (nationwide) footprint. BofA sees a core checking account, financial education, in-language communication, and remittance as the key drivers to attract Hispanic business.

Meanwhile, there are 340,000 Latino-owned small businesses in California and 25,000 of those companies do more than $1 million in annual sales. As a result, the New York Times reports there are plans under way to open three new banks to go after the Latino market.

By 2010, Hispanics will have 9.2% of the nation’s purchasing power, according to the Selig Center for Economic Growth at the University of Georgia. With one-third of U.S. born Hispanic residents and one-half of all Mexican immigrants unbanked, there’s a big market upside.

So while Congress debates the status of immigrants, more and more banks are tailoring their products to meet the nation’s newest immigrants. They will target Hispanics where they work and where they live, installing ATMs and tailoring mortgage packages that do not require traditional documentation.

Hispanic students get less financial aid

Hispanic students get less financial aid for college than other students, says a new study by Excelencia in Education and the Institute for Higher Education Policy.

According to the study, Latino students received an average award of $6,253 in 2003-2004 school year, about $640 less than the national average.

Latinos also are more likely to end up in two-year colleges than other demographic groups, the study claims.

Researchers say the disparity comes from Latino students having less knowledge about how to access financial aid and being afraid of taking on debt. Additionally, many Latino students get into a cycle of working to pay for part-time classes, which limits the types of loans they can apply for. That, in turn, increases the likelihood Hispanic students will not complete their education as part-time students.

Among the suggestions for improvement: Increased financial education and counseling opportunities for Hispanic students.

International shared branching permitted

CUNA NEWS NOW reports that the National Credit Union Administration (NCUA) has given federal credit unions permission to engage in international shared branching activities with foreign credit unions. NCUA was responding to an inquiry about the World Council of Credit Unions' (WOCCU) "International Shared Branching" pilot project with Ecuador.

The agency said shared branching is a permissible activity as a correspondent service under the incidental powers rule. However, the opinion letter by NCUA Associate General Counsel Sheila A. Albin cautioned that the involvement of foreign credit unions "requires close attention to U.S. and international laws."

NCUA’s letter addressed WOCCU's contract with Caja Central Cooperativa Financoop (FINANCOOP), a corporate credit union in Ecuador, and credit union service centers to establish an "international shared branching" (ISB) network.

The ISB network includes a transaction switch and clearinghouse functions that enable members to conduct transactions with their credit union from a federal credit union or other networked credit union outside Ecuador.

The ISB network offers reciprocal services to members in Ecuador who need to transact business with their federal credit union. Credit union members can deposit and withdraw money from their share accounts through the ISB network.

"Under the incidental powers rule, credit unions may provide services that they are authorized to perform for their members to other credit unions. 12 C.F.R. §721.3(b). These services include disbursing share withdrawals and loan proceeds, check cashing services, and deposit services," wrote NCUA.

NCUA pointed out that funds accepted from nonmembers at federal credit unions for transmission to Ecuadorian credit unions are not insurable under the FCU Act, and ISB participants should notify depositors of the potential risk of loss during a transfer.

Hispanics now represent 14% of total population

At the end of 2004, 40.4 million Hispanics lived in the U.S., making up 14 % of the total U.S. population, says the Pew Research Center. Latinos are now not only the nation's fastest-growing minority group, but also the largest.

Latino immigrants have birth rates twice as high as those of the rest of the U.S. population, foretelling a sharp increase in the percentage of Hispanics who will be in schools and in the U.S. labor force. Between now and 2020, Latinos will account for about half the growth in the work force.

Part of the Pew Research Center’s Trends 2005 report, “Hispanics: A People in Motion,” examines demographic trends and labor market and educational outcomes. It also analyzes the diverse attitudes, values, beliefs, and language patterns of the Latino population.

Florida CU to offer mortgage docs in English and Spanish

Eastern Financial Florida CU, Miramar, Fla., is now offering bilingual mortgage documents and supporting mortgage educational materials.

The bilingual materials are designed to make Spanish-speaking home buyers more comfortable with mortgage lending, says a story in CU Times. Working with VMP Mortgage Solutions and Freddie Mac, the $2 billion credit union will be developing bilingual mortgage security instruments, notes, and other mortgage documents.

Parents and children tested the Thrive by Five money activities in Spanish. (Photo provided by CUNA)

Hispanic parents review CUNA preschool materials

Twenty-one Hispanic parents provided feedback on a draft Spanish translation of the popular pre-K financial literacy resource, Thrive by Five^TM: Teaching Your Preschooler About Spending and Saving, offered by the Credit Union National Association (CUNA).

CUNA's Center for Personal Finance will use parents' comments to prepare the final Spanish materials for CUNA's Website, where parents can download them at no charge later this year.

Parents and observers agreed the activities are useful and effective in introducing basic money concepts to very young children.

A grant from the Texas Credit Union Foundation funded the Spanish Thrive by Five^TM parent review project. Specialists from the Texas Cooperative Extension at Texas A&M University, Michigan State University Extension, and Extensión en Español translated the activities and conducted the Austin, Texas, review sessions.

In the first nine months after CUNA released Thrive by Five^TM in English last year, visitors downloaded more than 50,000 copies of the activities and 20,000 copies of supplementary materials, such as tips for teaching preschoolers.

Development of the original materials was funded by a grant from the National Credit Union Foundation, with additional support from the Ohio and Texas credit union foundations.

A recent guest on the radio show was Mayte Rivera, a member of MVFCU’s Board of Directors. The credit union representatives explained that Merrimack Valley FCU is now a community charter and what that means to the public.

CU sponsors Spanish radio show

Merrimack Valley, FCU, North Andover, Mass., is reaching out to the Spanish-speaking community of the Merrimack Valley by sponsoring a radio show that focuses on financial literacy issues. Dalia Diaz, the credit union’s cultural business development representative, produces and hosts the show. Among the topics recently covered on the program are savings and checking accounts, credit, elderly scams, and mortgage foreclosures.

(updated March 6, 2006)

CUNA offers project management tool for Hispanic outreach

With funding from the National CU Foundation, CUNA’s Hispanic Resource Center Advisory Group delivered a 20-step project management tool for credit unions wanting to serve the hispanic community to the board of directors for CUNA prior to the Governmental Affairs Conference in Washington, D.C.

The 400-Page “Hispanic Quick-Start Kit: A Step-By-Step Guide” is available free to credit unions through the resource center.

Danielle Chatfield, Chair of the advisory group, presented a hard copy of the binder to the board, noting that while the “quick-start” name might be somewhat of a misnomer, credit unions could use its contents in whole or in part by downloading whatever sections they so desired.

“We hope we can duplicate the success of our original effort,” Chatfield said, noting that CUNA’S initial binder saw more than 24,600 downloads since it was posted to CUNA’s web site in the fall of 2003.

The kit includes business plans, power point presentations, policies and procedures, documentation help, as well as marketing samples from the 115 credit unions that participated in the development of the kit.

Three Texas CUs are first to garner Juntos Avanzamos designation

Neighborhood CU, San Antonio Employees Federal CU, and West Texas CU are the first three credit unions to earn the Juntos Avanzamos designation from the Texas CU League.

At least five more Texas credit unions have applied to be recipients of the League’s Juntos Avanzamos (“together we advance”) designation as the League explores its potential to take its state-wide program national.

Texas credit unions that earn the Juntos Avanzamos designation receive a flag commemorating the designation. Flying the flag lets the Hispanic community know that they will receive friendly, affordable financial services from credit unions flying it. Additionally, credit unions that earn the designation become eligible to receive grant funding and Spanish-language brochures that help members with budgeting and cash management.

Applying for the designation means the credit unions must complete a seven-part application in which they outline their bilingual services, remittance services, and whether they accept the Matricula Consular or other foreign documentation. Credit unions must supply information about operations, products, demographics, service strategies, and internal support for the outreach effort.

Representatives from several leagues and CUNA learned more about the program at a recent informational meeting held during CUNA’s Governmental Affairs Conference.

Hispanics struggle with identity theft

Hispanics may need more help recovering from identity theft than other consumers.

That’s one way to read the findings of a consumer poll recently released by Nationwide Mutual Insurance Company that suggests Hispanics and African American victims of identity theft were more likely than other victims to have had their checking and savings accounts victimized.

Thieves racked up an average of $2,406 using a Hispanic victim’s identity the poll found. The study looked at 600 adult identity theft victims from 11 select U.S. markets. Victims in each group had an average household income between $50,000 and $75,000 with 200 Hispanics, 200 African Americans, and 200 victims from a random sample representative of the U.S. population in total.

One out of four Hispanic identity theft victims have not been able to restore their identities despite averaging nearly a year trying, the survey said. Overall, it took minorities nearly six weeks longer than other consumers to discover they were identity theft victims, the survey said. In addition, Hispanics (33%) were more likely to discover the crime through unusual or unexpected charges on their credit cards.

The profile of a Hispanic identity theft victim in Nationwide’s study: A 36 year-old married woman and a college graduate.

The findings further illustrate the need for financial education among Hispanics.

Hispanics could benefit from below market CU mortgage programs

Two new credit union affordable mortgage programs could go a long way toward helping Hispanic members build long-term wealth.

With home ownership one of the best ways for consumers to build wealth, the credit union movement recently announced two mortgage programs that should help facilitate wealth building for first-time home buyers.

In October, the Credit Union National Association (CUNA), state leagues, and National CU Roundtable announced plans to launch its Home Loan Payment Relief (HLPR) mortgage loan program. Participating credit unions offer a three-year adjustable rate mortgage at one percentage point lower than the national average for such loans to qualifying borrowers. The rate will be fixed for the first three years. After three years, it will adjust annually to market rates, with rate adjustments capped at one percentage point per year, and five percentage points over the life of the loan.

To qualify, a borrower's household income must be 100% or less of the area median income, except for certain "high-cost" areas. The program lowers mortgage costs and increases eligibility to qualifying credit union members who are buying a house.

The program demonstrates credit unions' commitment to serve all their members, including those of modest means. So far, about 40 credit unions have pledged more than $1 billion in below market mortgage funding.

Then in February the National Federation of Community Development Credit Unions (NFCDCU) announced plans to launch the CDCU Mortgage Center. The Mortgage Center will purchase loans to immigrant first-time home buyers. The center’s first purchase was of loans originated by Self- Help CU, Durham, N.C. The mortgage was issued to recent immigrants with Individual Taxpayer Identification Numbers (ITINs), instead of Social Security numbers. This type of loan, while having a strong track record over the past few years, is not readily saleable in major secondary mortgage markets.

The CDCU Mortgage Center’s initial loan purchases were to first-time home buyers in areas that the U.S. Treasury Department’s Community Development Financial Institutions Fund has designated as “hot zones” due to high levels of economic distress.

With credit unions facing increased oversight from Congress to demonstrate and document their service to people of modest means, both of these new mortgage initiatives will be helpful to the credit union movement.

CUNA’s “HLPR Mortgage Loans Make the American Dream a Reality” statement stuffer explains the HLPR mortgage program in terms consumers can understand. To view, click here.

17% of U.S. children under age 18 are Hispanic

All 50 states saw an increase in the Hispanic proportion of their youngest inhabitants, according to the Census report “Changes in the Lives of U.S. Children—1990 – 2000.”

In addition, 17% of U.S. children under the age of 18 are Hispanics, the report says. That’s up from 12% in 1990 and represents an increase of 4.6 million Hispanic children.

The rate of increase varied by state with nearly a 15 percentage point jump in Nevada. On a regional basis, the less than age 19 population of Western states is 33.3% Hispanic overall and has increased the fastest since 1990.

The percentage of all U.S. children speaking a language other than English at home rose from 13.9% in 1990 to 18.4% in 2000. That news comes on the heels of a report in Hispanic Business magazine that suggests Hispanic consumers (not just young people) are moving from Spanish to English and at the same time from traditional media to the Internet. Since 2002, online ad spending to reach Hispanics has grown 900% and online expenditures now total an estimated $100 million.

Know the Census data of Hispanics in your community

Credit unions looking to tap into the Hispanic market should take a close look at their market.

For example, U.S. Census data shows Florida Central CU’s Hispanic population has the following makeup: 25% Mexican; 34% Puerto Rican; 16% Cuban; 5% Columbian, 4% Spaniard; and 16% other.

Laida Garcia, executive vice president of Florida Central and vice chair of CUNA’s Hispanic Resource Center Advisory Group, suggests credit unions get to know which subgroups make up their Hispanic community because different groups have different media habits.

For example, Garcia explains that research has shown Columbian-American Hispanics watch the most television; Cubans spend most of their time reading weekly periodicals; Dominicans spend most of their time listening to the radio and reading daily newspapers.

“Before my credit union invests significant marketing dollars to reach this community, I would want to know the media preference of the Hispanics in my marketing area,” she said.

Internet a growing and important medium for Hispanic market

If your strategy for serving Hispanics does not include providing Web services, rethink it.

ComScore Media Metrix reports there were 14.4 million unique U.S. Hispanic Web users in 2005. That’s up 6% and expected to grow at an average annual rate of nearly 7% through 2008. To put that in perspective, the overall average annual growth rate for the U.S. online population between now and 2008 is 2.8%.

While Hispanics account for 14% of the U.S. population, they still only represent 7% of those signed onto the Internet. Marketers are particularly focused on English-speaking Hispanics who are just as likely to use the Internet as non-Hispanic whites. In fact, seven of 10 people in both market segments are now wired.

In somewhat of a surprise, of all Hispanic Web users in the U.S., 52% prefer English-only Web sites, while 27% prefer bilingual materials.

CUs target Latino market with branch, bilingual Web site

Credit unions are continuing to reach out to serve the Hispanic market.

Mountain High FCU, Spanish Fork, Utah, opened its first Latino branch office in Utah County on Friday, Feb. 10. Zulma Sauceda, a Miss Utah Hispanic Pageant contestant participated in the grand opening, which featured family entertainment

In addition, North Island CU, San Diego, Calif., has launched a Spanish-language Web site to offer products, services, and information to the Hispanic community.

The Spanish-language site, "Mi Isla," mirrors the English-language version, "My Island." The Spanish-language site is accessed by a link at the top of the credit union's home page.

Geri Dillingham, North Island's executive vice president and chief operating officer, said the $1.5 billion credit union invested in training, translation, and programming to create a credit union portal to financial services for the Hispanic community.

The credit union plans to introduce Spanish versions of its consumer brochures in early 2006 and will provide Spanish-language options for online and telephone banking by midyear.

Hispanics using branch may lack FI relationship

Half of Hispanic consumers who cash checks in financial institution branches lack a relationship with any type of financial institution, according to a new study and reported in CUNA News Now.

Synergistics Research Corp. based its survey on 1,000 telephone interviews with Hispanic consumers age 18 or older. Four in 10 Hispanic respondents said they have a financial institution relationship, while eight in 10 reported using a branch.

Cashing checks was the most common reason for visiting a branch, with half of respondents using the branch to cash checks. Hispanic consumers reported visiting branches an average of 3.6 times a month, or roughly once a week.

Synergistics CEO William H. McCracken said the survey revealed "significant opportunities" to use check cashing as a point of contact to cross-sell checking accounts and other services.

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