Plenary Session: Understanding the Latino Marketplace

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Plenary SessionUnderstanding the Latino
Marketplace

• Third Latino CU Conference
• NFCDCU
• San Juan, Puerto Rico
• Presented by
• Elsa Montes, Arrowhead CU
• George M. Poitou, SCE FCU

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Hispanic Market Why?

• CU Philosophyserving the underserved (doesnt
  just mean small-means) must be a philosophical
  imperative for credit unions
• Good businessnot for profit but if no profit, no
  credit union

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Serving Hispanic MarketBankers Threats

• Attack on State and Federal levels to repeal the
  tax-exempt status of CUs
• Banks charge that CUs are not serving underserved
  communities
• Banks have onerous Community Reinvestment Act
  (CRA) compliance responsibilitiesCUs dont and
  therefore, do not serve the underserved.

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Serving the Hispanic MarketFCU Act

• Chapter 12 of title 12 of the U.S.C. section
• 1751 states in part
• An act to establish a Federal Credit Union
  systemand to make more available to people of
  small means credit for provident purposesthereby
  helping stabilize the credit structure of the
  United States.

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Who is the Hispanic Market?Exciting Statistics

• Hispanics represent the largest minority group in
  the United States
• Now 14 of 288 million in U.S. are Hispanic
• New arrivals looking for social or economic
  opportunities
• Education varies depending on country of origin
• 630 billion in 2003 (9th largest economy in the
  world)
• Latinos are Young Young Opportunity
• 1 in seven Hispanics are under the age of 18
• 2nd largest segment of U.S workforce
• Hispanic owned business growing
• 8 of all businesses1.8 million firms with
  receipts of 210 billion employing 2.1 million
  people (source economic census)

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U.S. Consumer Segments

• White
• Hispanic or Latino
• Black or African American
• Asian
• American Indian or Native Alaskan
• Native Hawaiian or Pacific Islander
• Other

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U.S. Hispanic Market

• Mexican
• Puerto Rican
• South American
• Central American
• Dominican
• Cuban
• Spanish
• Others

Hispanic is a general term for people with
origins in a Spanish Speaking country either by
nationality or ancestry.
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Who Are Hispanics or Latinos?

• Americas largest minority group
• Majority by year 2020
• Non-Spanish speaker
• 30 of U.S. Hispanics speak English only
• Professionals, laborers, students
• U.S. citizens or naturalized
• Mainstream
• Assimilated speak English, some Spanish
• Unassimilated speak Spanish, some English
• Documented or undocumented worker

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Age Distribution by Sex and Hispanic Origin 2002
Non-Hispanic White
Hispanic
Male
Female
Female
Male
Note Each bar represents the percent of the
Hispanic (non-Hispanic White) population who
were within the specified age group and of the
specified sex.
Source Current Population Survey, March 2002,
PGP-5
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Financial Habits

• 49 of Hispanics have checking accounts vs. 81
  Non-Hispanic Whites
• 45 of Hispanics have credit cards vs. 70 for
  Non-Hispanic Whites
• 5 of Hispanics have a mortgage loans vs. 36 of
  Non-Hispanic Whites
• 12 of Hispanics have tradable investment
  accounts vs. 28 for Non-Hispanic Whites

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More Demographics

• 64 employed 14 homemakers 8 retired 4
  students 10 unemployed
• 35 Democrats 46 neither party 70 registered
• 51 blue-collar 45 white-collar
• 89 believe it is important to learn English
• 75 say they would be more loyal to companies
  with ads in Spanish
• Source Pew Hispanic Center/Henry J. Kaiser
  Foundation

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Credit Union Loan GrowthAnnual Percent Growth
Percent Change, NSA

Source CUNA Economics and Statistics
13
Loan-To-Savings Ratio
Percent
Source CUNA Economics and Statistics
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U.S. underserved Markets your potential
market!

• 63 Hispanic 17 Asian 18 Caucasian
• 45 home owners
• 53 with income over 38,000 26 over 65,000
• 56 at least H.S. graduate

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How are banks capturing the Hispanic consumer?

• Wells Fargo Bank First to accept Matricula
  Consular ID Card
• Bank of America 8 out of 10 new checking
  accounts--Hispanic market representatives
• Have dedicated team of Bus. Dev. employees
  focusing on Hispanic community
• Significant budget for consumer attraction
• Union Bank Campaign to move people from check
  cashing to main stream banking through
  education and community involvement

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How are banks capturing the Hispanic consumer?

• From Micro-loans to SBA programs, Banks are
  slowly waking up to the possibilities of the
  Hispanic Market
• L.A. Times March, 2004
• Mortgage firms awaken to opportunities of
  financing mortgages for Hispanics
• Mortgage News Feb, 2004

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How are Credit Unions not Capturing the Hispanic
Market

• We treat all our members equally.it is more
  important to serve all our members
• We have responsibility to protect our members
  capital
• We stick to policy and dont deviate - no matter
  who it is
• We are concerned about fraud

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Why Good Business for C.U.s?

• Good credit risk
• Profitable accounts
• Makes political sense

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Serving Hispanic MarketMarketing

• Provide basic documents in Spanish
• Hire a professional to transcreate

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Serving the Hispanic MarketStrategies

• Meet community leaders - political and civic
• Visit local churches/schools
• Participate in community functions
• Develop relationships with companies for employee
  programs
• Talk to and market in local media
• Become part of the fabric of the community

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Serving the Hispanic MarketInternal Strategies

• Staff should reflect your community
• Test for ability to speak Spanish-surname not
  enough
• Do have employees review translation from
  professionals, not do bulk of translation
• you wouldnt have a teller write your English
  language print material
• Educate staff about credit union history and
  philosophy

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Serving the Hispanic MarketInternal Strategies

• Secure Board/Senior Management commitment
• Board should reflect membership (potential)
• Internally communicate sincere desire to capture
  this market
• Invite staff to provide suggestions
• Create an internal and community advisory group
• Actively plan, track results and update
  strategies

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Additional Benefits for C.U.s

• Provides great philosophical and humanitarian
  satisfaction
• Tremendous potential for market share
• Increases CU industry visibility
• Aids community development
• Critical mass more business opportunities
• Great political value and power

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Presenters

• George Poitou
• SCE FCU
• www.scefcu.org
• [phone]
• Elsa Montes
• Arrowhead CU
• www.arrowheadcu.org
• [phone]