Iowa CUs Profit from Serving the Hispanic Market

WOCCU’s International Remittance Program Adds to Service Experience

Village CU members José Francisco Batres (center) and Martha Alarcón (right) hope to save enough money in their credit union account to open their own restaurant and pay for the education of their daughter Nayeli (left).

DES MOINES, Iowa—José Francisco Batres and Martha Alarcón are hard-working Mexican-American immigrants. The pair, who moved to the United States from the Mexican state of Veracruz six years ago, puts in 14-hour days at a Des Moines restaurant. They also are active members of Village Credit Union (VCU), which serves anyone who lives or works in Polk and surrounding counties.

The couple originally joined VCU to send money home to Mexico using World Council of Credit Unions’ (WOCCU) international remittance program IRnet^®, a service offered through credit unions by the for-profit WOCCU Services Group. The credit union’s fees were lower and the service friendlier than they were at the large commercial bank the couple previously patronized. Eventually Batres and Alarcón opened a savings account in hopes of saving enough money to educate their daughter Nayeli and one day open their own restaurant.

The pair also joined VCU’s Hispanic Advisory Group, providing critical insights into helping the credit union increase its membership by reaching deeper into Des Moines’ growing Hispanic community. VCU quickly became one more Iowa credit union to see the value in providing services to this rapidly growing demographic.

“The Iowa Credit Union League [ICUL] believes credit unions have a huge opportunity to help solve the current economic crisis by serving the underserved Hispanic market,” said Patrick Jury, the league’s president and CEO. “Hispanics demonstrate a high workforce participation rate, increasing household income, collective purchasing power and booming entrepreneurship, all elements that will help credit unions drive membership, portfolio and asset growth.”

ICUL in 2006 also formed Coopera Consulting specifically to help Iowa’s credit unions better serve the state’s Hispanic market, Jury said. Coopera’s success has led to additional work with credit unions or credit union systems in Louisiana, Nebraska, New York and Oregon and, most recently, as a CUNA partner to develop a credit union strategy to serve Hispanics nationwide.

WOCCU EVP and COO Brian Branch (center) discusses the advantages of serving Hispanic members with the Iowa CU League's Patrick Jury (left) and Murray Williams (right).

“The work that Coopera has done with Iowa’s credit unions has helped them reach out effectively and serve these communities. Across the United States, we have seen Coopera’s positive impact on credit unions seeking to improve their services to Hispanics,” said Brian Branch, WOCCU executive vice president and COO. “Success is determined by how well credit unions understand and adjust to Hispanic cultural elements that contribute to their member loyalty. Coopera is a great resource for serving Hispanics and providing cultural sensitivity that can result in a groundswell of new member applications.”

Like VCU, Des Moines Metro Credit Union (DMMCU) is another client of Coopera that has benefited from serving the city’s Hispanics. Previously, the credit union had been losing members as Des Moines’ city limits have expanded westward. After a demographic analysis, DMMCU discovered a large population of working class Hispanics and Sudanese in the downtown neighborhoods near the credit union who were not being served. The credit union reformulated its marketing mix to include Spanish radio stations and publications. It also started offering credit-building loans starting at US$500 to help new immigrants establish credit and gain a foothold in the local economy.

As a result, DMMCU’s membership began to once again grow, and the credit union found itself in non-traditional services, including sending remittances through WOCCU’s IRnet. Credit union staff even helped one couple sort out purchase problems with a local car dealership as part of their auto loan application and another member cope with identity theft. The extra effort has been worthwhile, according to Traci Stiles, DMMCU’s business development manager, because news of the credit union’s services has spread rapidly by word-of-mouth through the Hispanic community, resulting in an influx of members.

“This is a market segment that is very loyal and a pleasure to serve,” Stiles added.

World Council of Credit Unions is the global trade association and development agency for credit unions. World Council promotes the sustainable development of credit unions and other financial cooperatives around the world to empower people through access to high quality and affordable financial services. World Council advocates on behalf of the global credit union system before international organizations and works with national governments to improve legislation and regulation. Its technical assistance programs introduce new tools and technologies to strengthen credit unions' financial performance and increase their outreach.

World Council has implemented more than 290 technical assistance programs in 71 countries. Worldwide, 51,000 credit unions in 100 countries serve 196 million people. Learn more about World Council's impact around the world at www.woccu.org.