MODESTO, Calif. - Like many others, Community Trust Credit Unionin California's central valley is aggressively going after theHispanic market. But the $50-million credit union has done morethan hire a couple of bilingual tellers. Community Trust hascompletely overhauled its marketing strategy, changing its name andpartnering with two established entities: a local car dealershipthat caters to Spanish speakers, and a non-profit organization witha 37-year history of providing social services to the Hispaniccommunity. Formerly Food Processors Credit Union, CTCU already hada foothold in California's agricultural industry, which employsmore than one million people, produces more than half of thenation's fruit, vegetables and nuts, and draws hundreds ofthousands of migrant farm workers to the area. The credit union'sagricultural history and a community charter had already resulted alarge percentage of Hispanic members, but there was still the needto do more, said Sandell McLaughlin, CTCU's Community DevelopmentDirector. McLaughlin told a familiar story: undocumented workerswere unable to open accounts, so they cashed paychecks, often atinflated costs; and, because they dealt only in cash, were targetsof crime that sometime turned violent. And not only wereundocumented workers unable to enter the financial mainstream, evenlegal immigrants had a general distrust of financial institutions,McLaughlin said. "In Mexico, banks are only for rich people, andcommon people are not welcome there, so why would they be here?"she explained. The community development pro added that in additionto cultural differences, the instability of Mexican bankscontributed to a distrust of all financial institutions. The creditunion built its first partnership six years ago with RobertMendoza, the owner of a used car lot who is trusted within theHispanic community. Mendoza was looking for an institution that waswilling to make used auto loans to first-time borrowers who werelegally in the US, but lacked a credit history. Although the creditunion already had risk-based pricing in place, CFCU had to makesome adjustments to its underwriting strategy to fund Mendoza'scustomers, including using household income instead of just theborrower's income, because there are often more than two adultscontributing to the household. "We've tried to be more holistic andstill make good loans, and I think we've done that, because ourdelinquencies are almost nil on these loans," McLaughlin said,adding that the credit union was very careful not to break anyregulations while loosening underwriting policies. After Mendoza'srecommendations resulted in memberships, the credit union was opento another partnership when El Concilio came calling in 2003. ElConcilio, which provides 21,000 central valley residents withsocial services each year, was looking for a partner to providesafe check cashing, wire services to Mexico, and an opportunity forits clients to enter the mainstream banking system with an thriftinstitution. Jose Rodriguez, Executive Director of El Concilio,said he couldn't find an institution that was willing to devote thetime and money required to adequately serve his clients' interests.Rodriguez recalled that when he would meet with prospectiveinstitutions, he was frustrated that many were primarily concernedwith how much it would cost to reprint materials in Spanish. Someeven voiced concerns about having bilingual staff, because amanager unable to speak Spanish would be unable to regulate, orlegally defend, what the bilingual employee was telling thecustomer. "It has to be a long-term commitment. Financialinstitutions can't expect to roll out the carpet today and haveeveryone come in - it takes time to establish trust, get the wordout, and teach the benefits of having an account. Institutions mustmake the investment before they can see the return," he explained.To Rodriguez's surprise, Community Trust already had brochuresprinted in both English and Spanish, and not only was more thanhalf of the staff bilingual, they were permitted to conductbusiness in Spanish, if needed. An El Concilio board member wasinvited to make a presentation to the credit union board, and "weintroduced them, let them date for a little while, and therelationship blossomed from there," McLaughlin said. Because 70% ofCommunity Trust members are Hispanic, the institution was able togain designation as a community development financial institution,and qualified for CDFI grants. Money from the first grant was usedto open a branch at El Concilio's Stockton headquarters. "ElConcilio has bent over backward in making their resourcesavailable, from running a full page ad promoting the credit unionin their newspaper for free, to promoting us with their peopleconstantly," she said, adding, "it's been an excellent partnership,and I'm looking forward to seeing some final figures as they rollin." McLaughlin said the 6-month old branch is only averaging fivenew members each month, but is only open two days a week. Thebranch also allows non-members to use money order and money wiringservices, hoping that these services will gain their trust andconvert into memberships. Community Trust is also very active infinancial education, winning a 2005 CUNA Diamond Award for itsMoney Sense CD-ROM training program, which El Concilio uses toprovide financial education. The credit union also participates inthe Volunteer Income Tax Assistance (VITA) program, which matchesuniversity business and accounting students with low-incomefamilies to provide income tax filing assistance. "This was ourthird year, and we did 190 returns that resulted in an average$2,500 refund," McLaughlin said, "and if you do the math, thatmeans that more than $500,000 went back into the hands of theworking poor as a result of this program, which is something we'revery proud of." While assisting with forms, CTCU employees educateVITA clients about credit union accounts, including direct depositfor faster refunds, and help undocumented workers gain ITIN numbersso they can file taxes through the 10-year-old controversial IRSprogram. McLaughlin said the 12,000-member credit union is notplanning any new programs or partnerships in the near future."We've really become overwhelmed with opportunities, because asword gets out, there are just so many places we can take this," shesaid. "Right now, we're just trying to maintain our servicestandards and remain fiscally sound - it's important we don'toutgrow ourselves or burn our staff out." -

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