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Financial Inclusion for Immigrant Consumers Roundtable Assessing your Readiness 1/16/15 Miriam De Dios, CEO Coopera Pablo DeFilippi, VP Membership & Business Development, Federation
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
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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
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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
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Conduct a Readiness Assessment
• Conduct an opportunity assessment of members and prospective members
• Measure your organizational culture • Measure your operational readiness
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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?
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Membership Analysis
Resource: Coopera’s Hispanic Membership Analysis 7
Market Scan
Resource: Coopera’s Hispanic Opportunity Navigator 8
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
Resource: Coopera’s Hispanic Opportunity Navigator 9
Operational Readiness
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• Personnel – bilingual capacity, outreach role • Products – financial education, accounts, transactional
services, loans • Processes – account opening, lending • Promotion/Marketing – materials, communications,
outreach, partnerships
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
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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
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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
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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
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Next Steps
Develop a Strategic Growth Plan Make Operational Adaptations Build Partnerships Outreach
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SCALING UP EXPERIENCES FROM THE FIELD
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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
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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 (4th Qtr 2014)
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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.
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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.
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No Magic Bullet
DACA Loan
Credit Builder
Personal Loans
Auto Loans
Mortgage Loans
• DACA loan just an entry point • Access to affordable credit helps members move along the
credit continuum to reach critical financial goals.
End Goal: Make all credit union services available and accessible to immigrants Financial Inclusion = Economic Opportunity = Strong Communities
RESOURCES
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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
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Readiness assessment
Strategic Growth Plan
Operational Adaptations
Partnership Building
Contact Coopera at [email protected]
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 [email protected]
Contact Us Coopera Miriam De Dios CEO [email protected] 515-221-6102 www.cooperaconsulting.com
© 2015 Coopera. Original information contained within this presentation is copyrighted and cannot be used without expressed written consent from Coopera.
Federation Pablo DeFilippi VP of Membership & Business Development [email protected] 800.437.8711 x304 www.cdcu.coop
