Credit unions from the West Coast to the South and the Midwestare waking up to the fact that reaching out to potential Hispanicmembers is an important part insuring a growth for theindustry.

According to U.S. Census Bureau estimates, there are roughly52.0 million Hispanics living in the United States, representingapproximately 16.7% of the total population, making people ofHispanic origin the nation's largest ethnic or race minority. TheU.S. Hispanic population is estimated to reach 132.8 million by2050.

 “Reaching and serving the Latino community is not onlyphilosophically a good thing for our credit union, it is also aninvestment for membership growth for our credit union,” said ChadCunningham a loan officer for the $385 million Consumers CreditUnion in Kalamazoo, Mich.  “We want to live out ourmission statement of providing quality products and services thatcontribute to the economic and social well-being of our entirefield of membership. It is essential that our strategies take intoaccount the fact that the Latino population is currently thefastest growing demographic in Michigan. Over the past 10 years,while the total state population has decreased, the Latinopopulation has grown 35%.”

Consumers CU created a strategic Hispanic outreach plan as wellas a local Hispanic businesses group, similar to a Hispanic chambera commerce with the help of Des Moines, Iowa-based firm Coopera Consulting. 

“To truly compete in a rapidly changing financial marketplace,credit unions must be strategic about their positioning within thecommunities they serve,” said Miriam De Dios, CEO of Coopera. “Notall credit unions have embraced the prospect of increasing effortsto attract, serve, and retain Hispanic and new American populationsand I think this is still an untapped market.”

With the Hispanic population on the rise and nearly half of theHispanic community lacking mainstream financial services, creditunions are in the perfect position to distinguish themselves fromthe competition, De Dios said.

“The Hispanic community can be very hesitant to join creditunions because of the history many have with the financialinstitutions in their home countries,” she said. “There are alsopolicies that have been created that prevent Hispanic consumersfrom obtaining financial services. Without traditional forms ofidentification, Hispanics are reluctant to try and becomemembers.”

With that in mind, credit unions such as Security ServiceFederal Credit Union headquartered in San Antonio and Santa Cruz Community Union in Santa Cruz, Calif., accept thematricula card– a form of identification issued to Mexicannationals by consulates–as a valid form of identification to open achecking account.

Late last year, the  $103 million in assets Santa CruzCredit Union hosted a Mexican consulate's matricula ID event, andmore than six hundred people attended  to obtainidentification cards. In the weeks following the event, accountopenings in the credit union's Watsonville branch increased nearly5% as a result of the credit union's participation. California'sHispanic population is 14 million, the highest of any state and inTexas, Hispanics are the fastest-growing population group, makingup 38% of the population according to the U.S. Census Bureau.

Some credit unions struggle with persistent, yet false,assumptions that most of the Hispanic population is undocumented. Arecent poll by the National Hispanic Media Coalition found that more than 30% of Americans believe that more than halfof Hispanics are in the country illegally. The reality is that 37%of U.S. Hispanics are immigrants, and only 18% of Hispanics areundocumented.

“We accept the matricula, and I know other financialinstitutions in the area do not, and I think that's ridiculous,”said John Worthington, senior vice president for the $6.7 billionSecurity Service Credit Union. “This is an underserved populationand we go above and beyond to serve our Hispanic members because weare all part of the same community.”

Once credit union are able to get Hispanic members inside theirdoors, there is still a lot of work to be done, De Diossaid.  “What we have seen is that Hispanic consumersprefer high levels of member service, valuing personalrelationships over things like speed and efficiency,” she said. “Webelieve credit unions are well-suited to providing the Hispaniccommunity with the financial services it needs.”

American Hispanics show a great deal of loyalty towards brandsand companies that cater to their needs. When Hispanics find aproduct or service that they have confidence in, they tend to stickwith it. Research by the Pew Hispanic Center has found that 61 % ofHispanics find it difficult to change brands once they find onethey like. Further, 59% claim to have no time to investigate thequality of different brands. Given this reputation for brandloyalty, the Hispanic market should prove to be the credit unioncommunity's dream said Worthington.

“It's  in a lender's best interest to develop a strongrelationship with the burgeoning Hispanic market,” he said. “Wedidn't just discover this though, we've been serving this marketfor more than 50 years.”

Hispanics also have a purchasing power that's expected to reach$1 trillion next year, according to the Selig Center for EconomicGrowth, Athens, Ga. And yet 40% to 55% of U.S. Hispanics don't havea relationship with a traditional financial institution.

That's a rich vein for credit unions to tap. With Hispanics'wealth and population rising three times faster than the U.S.average, the FDIC predicts that they will account for more than 50%of U.S. retail banking growth over the next decade. That amounts tomore than $200 billion in new business, since U.S. retail bankingrevenues are projected to increase 44%, to $963 billion over thedecade, according to Economy.com.

A report commissioned by the California and Nevada Credit UnionLeagues and Applied Research Institute  conductedestimates for California and Nevada, estimating that if 10% of eachstate's Hispanic adults were members of a credit union, the numberswould be compelling. In California, they would contribute anestimated $2.1 billion in loan balances and $592 million to annualincome. Nevada's Hispanic adults would contribute an estimated $82million in loan balances and $28 million to annual income.

“Working closely with local organizations with deep connectionsto our Hispanic community is key,” said Elizabeth Carr, CEO ofSanta Cruz Community Credit Union. “These partnerships provide aconduit for our credit union to do financial education, teach thevalue of saving, borrowing and credit building, as well as helpunderserved Hispanic members open accounts in a safeenvironment.”