Financial Inclusion for Immigrant Consumers Roundtable Assessing your Readiness 1/16/15 Miriam De Dios, CEO Coopera Pablo DeFilippi, VP Membership & Business Development, Federation
Coopera Our Mission: To partner with people, businesses and communities for new economic opportunity Our Founder: Warren Morrow sought to provide dignified financial services to Hispanics through credit unions We help your credit union grow by reaching and serving the Hispanic community We are owned by Affiliates Management Company, holding company of the Iowa Credit Union League We are a CUNA exclusive strategic alliance partner 2
The Federation: Our Mission: To help low- and moderate-income people and communities achieve financial independence through credit unions. Foster Innovation Develop new products and services to reach low and very low-income people Foster strategic partnerships to expand service delivery Identify, document and promote best practices Raise and channel investment Invest more than $30 million in Member CDCUs Strengthen CDCUs financial position to expand impact Capacity Building Technical assistance, webinars, practical tools, guides, Consulting services support CDCUs at all stages of development 3
What s Important? Understanding your opportunity Having an inclusive organizational culture Having buy-in at all levels of the organization Adapting to the needs of the market Personnel Products Processes Promotion/Marketing Financial inclusion 4
Conduct a Readiness Assessment Conduct an opportunity assessment of members and prospective members Measure your organizational culture Measure your operational readiness 5
Opportunity Assessment How many immigrant members are you serving today? What s the language preference of your immigrant membership? What products and services are your immigrant members using? How many immigrant members reside in your field of membership? What is the ethnicity, acculturation level and language preference of prospective members in your field of membership? 6
Membership Analysis 7 Resource: Coopera s Hispanic Membership Analysis
Market Scan 8 Resource: Coopera s Hispanic Opportunity Navigator
Organizational Culture Do you have an inclusive/welcoming culture? Have your board, management and staff bought in? Have you addressed common concerns at all levels? Coopera s Cultural Score 9 Resource: Coopera s Hispanic Opportunity Navigator
Operational Readiness Personnel bilingual capacity, outreach role Products financial education, accounts, transactional services, loans Processes account opening, lending Promotion/Marketing materials, communications, outreach, partnerships 10 Resource: Coopera s Hispanic Opportunity Navigator
Adapt & Repackage Products Savings (SAFE, interest-bearing accounts, special purpose) Prepaid reloadable cards Remittances Checking Citizenship, residency, DACA, DAPA, immigration expense loans Credit-builder loans ITIN loans Small dollar loans Credit cards 11
Adapt your Processes New membership experience Customer Identification Program (CIP) for account opening Accepting alternative forms of ID Lending programs and policies ITIN and small dollar loans Credit-builder loans 12
Customer Identification Program (CIP) At minimum the credit union must obtain the following information prior to opening or adding a signatory to an account: Name Date of birth (for individuals) Residential or business street address, APO or FPO or address of next of kin (individual) or principal place of business, local office or other physical location (corporation, partnership, etc.); and Taxpayer identification number (U.S. person) or passport number and country of issuance, alien identification card number, or other government issued document bearing a photo or similar safeguard (non-u.s. person) 13 Source: NCUA Letter on the Bank Secrecy Act (BSA)
Account Opening vs. Lending Account Opening Verification of member s identity (CIP) Interest-bearing vs. non-interest bearing accounts Lending Obtain proper documentation to meet lending guidelines and perform income verification Need taxpayer identification number such as an ITIN or SSN 14
Alternative Forms of ID for non-u.s. persons Residency card (green card) Employment authorization document Passports Matricula consular (Mexico) Consulate cards Cedulas Municipal IDs Voter registration cards 15
Next Steps Develop a Strategic Growth Plan Make Operational Adaptations Build Partnerships Outreach 16
SCALING UP EXPERIENCES FROM THE FIELD 17
Immigration Financing 28 CDCUs across the country have developed micro-loan programs to finance application fees for Citizenship and DACA General Product Terms: Small dollar loans <$1000 6-12 month terms Flexibility on underwriting criteria and rapid turnaround No or limited credit check Flexible income verification and documentation (DACA) Checks often made out to USCIS and other relevant agencies 18
CDCUs Serving Immigrants Examples of CDCUs engaged in Citizenship/DACA financing: - Latino Community CU (NC) leads with 1,600 DACA loans - Self Help FCU (CA) 500+ loans - Northside Community FCU (IL): 350 citizenship loans - District Government Employees FCU (DC): 200 citizenship/daca loans - New Economy Project with Brooklyn Cooperative and Lower East Side People s: 100 DACA loans - NWAF\GCIR pilot with Lower Valley CU and Ascentra newly launched (4 th Qtr 2014) 19
Lessons Learned: Most loan programs are still in early stages - volume of referrals generally below expectations. Tight integration between immigrant\legal services organizations and lenders essential. Online platforms are ideal may not yet be integrated into CU systems. Most successful pilot studied has 8% of total applicant pool seeking and obtaining loans. With technology and targeted training, possible 15%-20% take-up rate. Fee waivers play a role. 20
Lessons Learned: Products must be affordable. Pricing should be consistent with the rest of your product line up Products must be transparent: Critical to gain the trust of target market (immigrant population, historically abused by fringe financial services providers) and those who serve them (CBOs) Products and processes must be simple, easy to understand and use Products must be accessible and convenient: on-line banking; mobile banking; micro branches; community partners Products should provide a pathway to financial inclusion (i.e. credit builder loan) Attitudes matter: People want to be treated with respect and dignity. 21
No Magic Bullet DACA loan just an entry point Access to affordable credit helps members move along the credit continuum to reach critical financial goals. DACA Loan Credit Builder Personal Loans Auto Loans Mortgage Loans
End Goal: Make all credit union services available and accessible to immigrants Financial Inclusion = Economic Opportunity = Strong Communities
24 RESOURCES
Coopera Resources Hispanic Opportunity Navigator Assessment Hispanic Membership Analysis Hispanic Target Market Analysis Consulting & Resource Library Account Opening Best Practices Lending Best Practices Community Partner Toolkit Education & Training Accepting Alternative Forms of ID Developing a Credit-Builder Loan Financial Education Best Practices Readiness assessment Strategic Growth Plan Operational Adaptations Partnership Building 25 Contact Coopera at info@cooperaconsulting.com
Federation Resources Advocacy and regulatory support around ID requirements A team of national recognized consultants with practical experience serving the Hispanic market and immigrant populations Best practices and research data National and local partnerships Extensive network of field practitioners Product development and implementation assistance: ITIN lending Citizenship and DACA lending Financial inclusion 26 Contact us at info@cubreakthrough.com
Contact Us Coopera Miriam De Dios CEO dedios@cooperaconsulting.com 515-221-6102 www.cooperaconsulting.com Federation Pablo DeFilippi VP of Membership & Business Development pablo@cdcu.coop 800.437.8711 x304 www.cdcu.coop 2015 Coopera. Original information contained within this presentation is copyrighted and cannot be used without expressed written consent from Coopera.