The large and growing need for affordable remittance transferservices represents an equally large business opportunity forcredit unions. This is especially true for those U.S. cooperativesserving Hispanic members with family in Latin America.

Once the domain of Latin mom-and-pop shops, remittance serviceshave in recent years become accessible to Hispanic and otherconsumers through their local credit unions.

Beyond simply allowing consumers another choice, providingremittance services also gives credit unions the chance to delivermore-comprehensive financial services to a largely underservedpopulation. In fact, remittance services are so successful thatCoopera has made it a best-practice solution for credit unionslooking to invest in the youngest, largest and fastest-growingsegment of the U.S. population.

It's important to understand remittances aren't necessarily atool for attracting new Hispanic members. Credit unions should viewthese services more as a value-added tool to increase the depth oftheir product suites. Credit unions with comprehensive programsultimately complete more remittances than those without a similarlyrobust program.

And according to a report by the World Council of Credit Unionsand Coopera, while credit unions that offer remittances tonon-members will likely have higher remittance volumes than creditunions that only serve members, processes need to be put in placeto ensure that cross-selling occurs and potential members learnabout the benefits of belonging to a credit union.

“Providing remittance services for our Hispanic members iscrucial,” said Traci Stiles, business development manager for DesMoines Metro Credit Union. “If we want Hispanics to view creditunions as their primary financial institution and gain theirbusiness, we must offer the products they need at a competitiveprice, such as remittance services.”

Unfortunately, several recent occurrences have complicatedremittance transfer services, putting many credit unions in adifficult position.

First, the Consumer Federal Protection Bureau targetedremittance transfers as one of several financial services in needof regulation to protect consumers. As a result, providers whoconduct more than 100 remittance transfers annually must meetadditional requirements, specifically in the area of updateddisclosures. These regulations become law on Feb. 7, 2013.

Due to a perceived burden to comply, several remittance transferproviders have ceased operations. And because many credit unionsrelied on these providers for their own remittance serviceofferings, quite a few cooperatives have found themselves in themarket for new provider partners.

Second, as of June 2012, IRNet, WOCCU's platform forremittances, ceased accepting new credit union applications in theUnited States. The council has recently announced a newrelationship with Pa-Go Mobile Inc. and mFunds Global PaymentSolutions Inc. for remittance services to Latin America.

Third, selecting a remittance transfer provider partner is not asimple process. Due to the wide range in services – everything fromgeographies served to hours of operation – choosing the best fitfor a credit union's local Hispanic community can be overwhelming.

Before settling on a partner, credit unions must firstunderstand their typical member's need, their country of origin andthe available locations within the typical recipient's country. Aswell, the credit union must examine its own local marketcompetition to provide the most competitive offering. What otherlocal organizations are providing remittance services? What arethey charging? What are their hours of operation, etc.?

As a result of increased regulations and the change in providerendorsements, the huge need for remittance transfers still exists,yet fulfilling that need has become intensely complicated.

Making matters worse, one of the largest remittance transferdays, Dec. 25, is just around the corner. Second only to Mother'sDay, Christmas provides a huge opportunity for credit unions tooffer remittance services. The upcoming holiday has created urgencyfor many credit unions that have found themselves without aprovider partner in recent months.

One alternative currently under investigation is the use ofperson-to-person payment platforms, such as PayPal or Dwolla, anonline, social and location-based payments platform supported byCoopera's sister company The Members Group.

However, it's important to understand international P2Ptransfers are not allowed today. So for this option to moveforward, several organizations must come together to research theoptions and to work with the appropriate parties to change existingrules, technologies and operations.

A second, more viable, alternative capturing the attention ofcredit unions now is the reloadable prepaid card. When issued to aHispanic cardholder in the U.S. alongside a secondary card for afamily member in Latin America, reloadable prepaid cards like theCoopera Card give cardholders an affordable and accessible optionfor sending money outside the country.

What's more, reloadable prepaid cards do not require compliancewith the CFPB's Feb. 7 remittance transfer disclosurerequirements.

While compliance with new laws will carry a cost, this costoften will fall on the shoulders of the service providers withwhich credit unions partner to make remittance transfers availableto members. These credit unions must keep in mind, however, thecredit union is ultimately responsible for providing theappropriate disclosures. So, credit unions must be in closecommunication now with their providers to understand what changesare being made to ensure compliance with the law come Feb. 7, 2013.

Although complicated, an international money transfer tool willcontinue to be a best-practice for credit unions' Hispanic outreachand service strategies. Therefore, it's vital for thesecooperatives to prioritize the research, due diligence andformation of strategic partnerships to continue (or to begin)providing this crucial service.

With the CFPB regulations still a few months away, and afluctuating remittance provider marketplace, there are likely to bemore changes in the near future. But for those credit unionsuncomfortable with the “wait and see” approach, reloadable prepaidcards provide a “right now” alternative – one that allows them tocontinue serving the critical Hispanic market today.

Anna Peña isclient account coordinator for Coopera Consulting in DesMoines, Iowa.