Before we kick off the new year with a fresh slate, CreditUnion Times decided to look back at a few of the opinions andletters to the editor of 2014.

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Here are the three that really got our readers talking.

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First up the ongoing Gen Y debate. Credit unions make nosecret about their desire to attract Gen Y members. But are theMillennials worth the effort?

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Gen Wait: Millennials Underbanked,Underfunded

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By Robert Bessel

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Who do you love more – theMillennials, the pundits who talk about Millennials, or the creditunions who offer all sorts of products to capture the Millennialdemographic?

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Let’s start with the Millennials themselves – the most hypedgeneration of all time. They were first introduced in 1981 as the“Echo Boomers.” They evolved into “Gen Y” – a weird mix of Gen Xand Y2K. When the world didn’t end on Jan. 1, 2000, Gen Y becamethe “Millennial Generation.” It’s more dignified – right? But tocredit unions they are becoming known as “Gen Wait.”

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This last moniker reflects a dawning realization that theMillennial generation is waiting to do everything that matters to acredit union. Millennials are simply not buying cars or houses.They’re not getting married, having children or planning forretirement. Why? Because college debt, high unemployment orunderemployment has crowded everything else out of the typicalMillennial’s wallet.

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According to demographer Ken Gronbach, the Millennials or Gen Ywill need to become far more entrepreneurial or face upwards of 50%unemployment. A startling forecast.

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The pundits have made quite a living from scaring credit unionsinto Millennial-oriented products. Mobile banking, mobile walletsand NFC are all great products. There’s just one problem: TheMillennial audience doesn’t have enough disposable income to takethat first bite of the credit union’s apple.

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All the mobile banking in the world won’t bring a horde ofunderbanked Millennials to a credit union’s door. And guess what?Not having mobile banking isn’t preventing them from visiting. Theysimply don’t have the money to get started!

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Credit union managers – let’s not all weep at once. TheMillennials are missing out big time, too. They have little to noexposure to financial basics – like shared draft accounts,budgeting and nickel-at-a-time savings plans. Case in point – myMillennial son who thought that standing in line to buy moneyorders was the best way to pay his bills.

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What’s the scariest part of the story? Every time I tell it tothe parents of a Millennial, they nod their heads and tell me,“Mine, too.”

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Given that the last enlightened generation – the Baby Boomers(and the small and over- indulgent Gen X, the group between theBoomers and Y) – whose finances have been challenged by difficulteconomies and overall poor planning, what hope do we have for theMillennials’ financial future? They will awaken to financialreality later than any generation before them. As a result, theyare guaranteed to have even fewer assets saved for retirement whenthey need them.

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All the talk about banking channels ignores one simple fact –the Millennial generation needs credit counseling more thananywhere, anytime banking. They need knowledge. They need tools tomodel their future. They need advice. They need products that willhelp them escape their financial black hole. They need ongoingsupport.

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Does your credit union want to attract and retain the Millennialgeneration? These ideas might be the most effective way to doit.

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RobertBessel is public relations directorfor COCCInc. in Avon, Conn.

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Read the counterpoint: Why Gen Y? Because creditunions can't wait...

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Why Gen Y? Because Credit Unions Can’tWait.

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By Ryan Ruud

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A few weeks ago there wasan opinionpiece in Credit Union Times ("Gen Wait:Millennials Underbanked, Underfunded." Jan. 13, 2014) thatseemed to suggest that the Millennial generation, those bornsomewhere between the early 80s and the early 2000s, were a lostgeneration.

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In many ways the net generation has its fair share of battlescars. The piece correctly cites the mile-high student loan debts,however arguably provides some questionable advice to credit unionsadapting to the digital era and what role millennials play ininfluencing digital strategy.

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The largest generation, not the small andover-indulgent

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Ignoring what’s become the largest generation since the boomersputs any business, especially credit unions at risk. Depending onwhere you look and how they mark the beginning and end of thegeneration, the size of the population ranges from the same as theboomers according to PewResearch, 76.3million or 27.4% of the population (1% more than boomers)to 86million or 7% larger than the boomers according toBarron’s. The Brooking’sInstitute even reports the generation is 30% larger thanthe boomer’s.

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Ignoring a generation of this size just for the shear buyingpower alone would be foolish. But it’s not just buying power we’rediscussing. The piece also claimed pundits have been “scaringcredit unions into millennial-oriented products like mobilebanking, mobile wallets and NFC.”

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Ignoring early adopters is equally as risky.

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Let’s examine the data and popular opinion around both buyingpower and the digital influence of this generation and whyultimately credit unions can’t wait.

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The facts: Economic power

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The great recession provided a front row ticket to finance andeconomics in motion for the millennial generation. Just as most ofthe generation was coming of age and entering the early years ofadulthood, the ground beneath them and the rest of the country gaveway. Arguably, living through the crises of 2008 and the years thatfollowed would shape how the generation felt about money.Joblessness and financial discomfort are not indicators of how ageneration behaves. They are indicators of how an economy raisedthe generation.

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But interestingly enough, that big ol’ generation has big ol’buying power and now that the economy is turning the corner and thegeneration is starting to age, key life moments are occurring whichalso are triggering key financial moments.

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Getting jobs and being successful atthem

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According to research by Badgeville,by 2025, Millennials will be 75% of the global workforce. Today 15%are already in management with 1 in 10 making over $100,000.

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Millennials age 25 -34 have recovered nearly 75% of jobs lostduring the recession according to Dick Hokenson, an economist whoheads ISI Group's Global DemographicsResearch team, cited in a Barron’s article last year.

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Getting married

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In the same report previously cited from the Pew, the toppriorities for the Millennial generation is not texting or partyingas some jaded pundits might argue. Instead the top 4 concerns pointto socio-economic opportunities. According to PEW datamillennial priorities are:

1. Being a good parent
2. Having a successful marriage
3. Helping others
4. Owning a home

Buying power

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In 2012, clothing retailer Macy’s launched a new strategy aimedat Millennials.Not to capture Facebook attention or Twitter. But to capture ashare of the more than $65 billion spending power of Millenials.Yes, Millennials are spending. Yes, they have money to spend.

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As Millenials continue to recover from the recession shock andachieve their goals of marriage and family, they willspend more. It’s a scenario that Macy’s is not alone inbetting on. Ford Motor Co. and Chevy are also stakingbig claims for the dollars (that some say Millennialsdon’t have and aren’t spending). In fact, Ford saw a whopping 80%increase from the first half of 2009 to the first half of 2013 insales among shoppers 18-34. Millennials are buying cars.

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Tempered enthusiasm

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It’s slow going for sure, for a generation with more than $1trillion in student loan debt, however there are signs that thelargest generation is starting to move. Signs that can’t beignored. Regardless of how you want to slice the data, when thegeneration is ready to spend, do you want to be closed forbusiness? Let’s just table whether or not Millenials as a buyer,matter.

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The facts: Digital influence

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Get your snake oil! Get your snake oil here!! Noone likes a snake oil salesman and no one likes to be scared eitherbut the truth is that there is no such thing as amillennial-oriented product when it comes to digitalstrategy. One only needs to look at the myriad reports, dataand trends to see that mobile, social and digital adoption is not amillennial-only trend.

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Mobile

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Mobile phone and smartphone usage is not a millennial onlytrend. A report from Forrester and broken down by emarketer shedssome interesting light. Assume you ignore “millennial-only”products related to mobile banking, mobile wallets and NFC. You’ve now ignored 93% of the U.S. market that has mobilephones, not to mention the 50% that has smart phones as of Januarylast year. (In all honesty, these numbers are substantially highertoday, as the rate of mobile adoption has increased at a blisteringpace.)

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Even debating mobile strategy seems risky. Mary Meeker, aventure capitalist and former Wall Street securities analyst nowfamous for her internettrends reports has some interesting data around mobileadoption.

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Boiled down. Smartphone use is in its infancy.

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Those annoying little devices at dinners and meetings may seemubiquitous, but globally we’ve only reached 1.5 billionsubscribers, a growth rate of 31% and penetration of 21%. Buthold your horses ... tablet adoption is even more rapid, at a rateof 3 times.

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The future

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While the debate rages whether or not to take on mobile bankingto appeal to those pesky Millennials, Googlequietly acquired thermostat company Nest. (Maybenot that quietly.) Why on Earth would they do that?

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Because. While mobile phones are at 94% adoption in the U.S andthere is still 80% global market share for smartphones to capture,and tablets are growing at 3 times the growth rate of smart phones:technology innovators are on to wearables, flyables, scannables andthe internet of things and early adopters will be the ones pushingahead how the rest of us use those.

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Pay attention to the early adopters, don’t ignore them.

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Diffusion of innovation

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In 2004 a few thousand students started joining a website. Tojoin, you had to have an email address that ended in .edu. You knowwhere I’m going with this. Today, with more than 1.19billion monthly active users, Facebook has affected the way wecommunicate with each other; get news and brands reach us and isalso a perfect example of the diffusion of innovation.

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The diffusion ofinnovation explains how technology in particular becomesmainstream. Without diving deep into the theory, the key hereis that looking at the theory and understanding adoption patterns,technology lifecycles can become great predictors of mainstreamadoption. Ignoring this time tested theory is precarious for anybusiness strategy.

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94 reasons digital matters

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With only 6% of the financial services market share, creditunions have an enormous opportunity to position themselves to winthe battle for market share on the technology front.

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Full disclosure

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Every generation has its trials and tribulations and isenlightened in it’s own way. To preclude any generation frombuying power is absurd when you’re dealing with population numbersin the millions. Further, each member of each generation has astory of their own and we can’t forget that. Individually we aren’tstatistics no matter what generation we belong to.

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However, when it comes to strategy and how technology adoptionrates play a role, this doesn’t become a discussion aboutgenerations. This becomes a discussion about trends andlifecycles.

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I am a product of the millennial generation. I’ve worked hard toget where I am. I have a mountain of student loan debt that I willbe paying off most likely as my children head off to college. I sawmy parents’ retirement fall out from under them so I’m cautiousabout following the traditional retirement savings advice. Yes, Iam jaded by the economic policies from the financial know-it-allswho caused many of the problems of the last recession. I’m recentlyengaged. I bought a car this year. I’m preparing to considera new home.

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There are a lot of things about the financial world I’m stilllearning. But what I don’t need is credit counseling. I need to notbe talked down to by my financial partners. What I do need IS apartner.

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Meet me where I am, online, social and on-the-go. I’m tired ofbeing talked down to and treated like a generation that doesn’tmatter, or that the disruption of our influence in technology tonot just the financial industry but nearly every industry issomething to be scoffed at or ignored.

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But more importantly, I’m optimistic. I’m optimistic that thegreatest days lie ahead for me, for our country and for the creditunion industry that embraces change and keeps moving forward.

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Ryan Ruud is vice president of marketing at theMinneapolis-based marketing firm result150.

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Next Up: Credit Unions Behaving LikeBanks?

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There has long been this debate of whether credit unions havelost their way by being more like banks. This Letter to the Editor by Mike Higgins Jr. sparked muchdiscussion:

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Credit Unions Behaving Like Banks: Letter to theEditor

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I read anarticle about a credit union recently in which the CEO proudlynoted a near-prime (ahem, subprime) lending program was responsiblefor generatingan ROA of 2.93%. I read another article where a creditunion CEO commented his ROAwas 2.22%.

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I was confused. Surely, no member-focused entity would produceprofit-mongering returns like that. I re-read both articles,just to make sure the information was correct. Unfortunately, itwas.

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Producing an ROA like what was mentioned in the articles is nota badge of honor, it is a shameful scarlet letter.

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Credit unions serve a dual mandate. They must extract enoughprofit from their members (ROA) to stay adequately capitalized(cumulative profit not returned to members) and at the same time,they need to create tangible economic value for their members(lower loan yields, higher dividends rates and fewer fees) whichcomes at the expense of ROA and net worth. The objective ofevery member-focused credit union should be to optimize, notmaximize, ROA so the dual mandate can be fulfilled.

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Identifying the optimal ROA is not difficult. It’s simply afunction of appetite for asset growth and the target net worthratio the credit union wants to maintain. For example, if theappetite for asset growth is 7.0% and the target net worth ratio is10.0%, then the optimal ROA is 0.70%. End of story. Producing anROA higher than 0.70% extracts too much profit from members(capital growing faster than assets). Producing an ROA less than0.70% deteriorates the net worth ratio (assets growing faster thancapital).

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Let’s circle back to the near-prime lending credit union. Theycharge their B, C and D members more to borrow money. It’s calledrisk-based lending. It should be called perceived risk-basedlending. The CEO confirmed this by noting that “during thedownturn, nonprime borrowers were not the ones that cost the creditunion the most money; it was the small number of prime and superprime borrowers.”

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I would assert this credit union has a moral and ethicalobligation to return some of the 2.93% ROA generated off the backsof their near-prime members to them. A member that does not miss apayment and successfully pays all of the money back should get arebate check. The credit union should recognize it was in error byover-charging for perceived credit risk when no credit risk wasrealized.

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The optimal ROA is also a number both the board of directors andthe management team can easily agree upon at planning time. It isliterally where the bar of performance should be set because itsatisfies the dual mandate. Once the bar has been set, it is up tothe credit union management team to create tangible economic valuefor members (productivity, pricing, convenience, service quality,etc.).

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The process of quantifying tangible economic value for members,in hard dollars and cents, is remarkably simple. It starts byidentifying a peer group, not based upon asset size, but based uponinvestment in day-to-day operating expense. The fundamentalquestion every credit union and their board should be asking is fora given investment in operations, what are our members gettingrelative to other credit unions that are making the sameinvestment?

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Once the group has been identified, comparisons can be made.Start with loans. If your credit union has more loan balance forthe same investment in operations, then you are creating tangibleeconomic value because your employees are more productive, know howto sell and the credit union has fewer assets earning the lowerinvestment portfolio return. The difference in loan balance appliedto the difference between the investment and loan yield is thetangible economic value created for members.

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Perform a similar type of member favorable peer analysis onrelationship shares (draft and regular shares), fee and otherincome generation, loan yield, investment yield, dividend rate andnet charge-offs. Once that is done, add up the cumulative result.If the cumulative result is greater than zero, the credit union iscreating more tangible economic value for members than the peergroup (and vice-versa).

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How the credit union makes money matters, not how much thecredit union makes. A member-focused credit union will live by thisethos. To those credit unions that don’t live by this ethos,shame on you and shame on your board for allowing it to happen.

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Mike Higgins Jr.

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Partner

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Mike Higgins & Associates, Inc.

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Kansas City

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In reaction to Higgins letter, readers with opposing andsupporting views weighed in on social media and on the CUTimes website.

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A reader named Tony H suggested the premise wasmisguided.

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"First, we should reject the notion that banks are evil andgreedy just because of their charter. There are some banks outthere that I think provide greater value and better service totheir customers than half of the credit unions in the US. ForQ2 2014, there are 10 in the country above $10M in assets that hada 2% ROA and at least 20% net worth. Most of them are verysmall. Instead of worrying about a unicorn stampede, why notinstead focus on all of the credit unions who are struggling toearn? If a credit union cannot earn, it cannot invest in newproducts, employee training, better technology, etc. How manycredit unions are simply existing out of habit?"

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Marvin Umholtz added, "The misguided dismissal of one creditunion's effort to generate exceptional ROA seemed downrightanachronistic and short-sighted. Both the regulators and thecompetitive marketplace demand ever-increasing capital so retainingmore earnings is a prudent strategic move."

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Reader David Meade also took issue with Higgins' assertions.

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"This letter is short-sighted in that there is a one-size fitsall solution for credit unions. This writer seems to think thathaving a large ROA means someone is pocketing that extra income.Perhaps, these credit unions are getting ready to invest in asizable CORE conversion or undertaking a new loan product andtrying to set up adequate reserves prior to launching it. Eachsituation is unique to that credit union and board of directors,"Meade said.

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Next Up: To Serve or Not to Serve UndocumentedImmigrants

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By far the most controversial Letter to the Editor to date camefrom William R. Clark, board member of HAPO Community Credit Unionbased in Richland, Wash., who believed credit unions should notserve undocumented immigrants.

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Credit Unions Should Not Serve Illegals

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After reading Peter Strozniak's article, OutreachEfforts Continue Despite Immigration Reform Stall, (CUTimes, Oct. 1, 2014), I thought for a moment that I must have readabout some of our politicians who would gladly sell their countryin return for votes and that infamous American form of bribe knownas a “campaign contribution.”

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Then, reality quickly set in; the author was in effectadvocating that credit unions facilitate illegal migration into theUnited States.

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One Webster definition of immigrant is “a person who comes to acountry to take up permanent residence.” That definition makes goodsense. The immigrant, as many of our forefathers and mothers did,comes to this country expecting to stay permanently. Thatdefinition, however, precludes the use of the term immigrant beingapplied to so-called undocumented immigrants. Since those aliensare here illegally, they cannot take up residence, for one cannotbe both resident, which implies a legal status, and illegal.

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The first step is thus simply to drop the term illegalimmigrant, or undocumented immigrant, from our discourse;undocumented is just another way to describe the status of an alienwho is not legal.

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Mr. Strozniak in his opening paragraph writes about “serving the11 million undocumented immigrants in anticipation of Congresspassing the long-awaited comprehensive immigration reformbill”.

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Leaving aside the reality that in our current political climate,Mr. Strozniak's anticipation may be lengthy, let's cut right to thechase: Credit unions have no more business serving illegal aliensthan they have serving money launderers. Both are illegal! That thecurrent administration will more likely ignore serving the illegalalien than serving the money launderer does not make the former anymore right.

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There is potential for overlap between the two. How does acredit union perform its legal duty to affirm the legal identity ofits customer in the case of an illegal alien? It cannot, for evenif the illegal alien produces some sort of identification, bydefinition that identification is suspect.

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If the illegal alien has sneaked across the border, we cannot bereasonably assured that he has not sneaked some sort of phony ID.One illegal activity tends to beget another illegal activity. Herethe illegal migration and the money laundering may well mix. Nocredit union should go anywhere near that unlawful combination. Itis a shadow world and credit unions have no business operating inthat environment.

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I have no hesitation whatsoever about serving the legal alienpopulation, whether determined to stay permanently or not. Creditunions should include that population in their marketing effortsjust as they should all other legal sectors of their market orpotential market. The only limitation on such service should bethat it does not expand to the point of infringing upon the rightsand benefits of U.S. citizens.

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For instance, no U.S. citizen should be precluded from servingin any job other than translator because he or she does not speak anon-English language; that is why we have translators. Otherwise,let's all be good hosts and hopefully add to our capital in theprocess.

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Mr. Stozniak goes on to say in the middle of his article that“by refusing to accept other forms of ID, financial institutionsare missing out on an opportunity to serve undocumented [i.e.,illegal] immigrants.”

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Well, there are just certain opportunities which we have toforgo in a legitimate business. The credit union serving illegalaliens would be aiding and abetting the perpetuation of the aliens’illegal presence in the United States. No credit union has any dutywhatsoever to provide services to illegal aliens, even if somemembers of the alien's family are members of the credit union.

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In reality, the credit union has a duty not to serve the illegalalien. When Luis Pastor said, “When you are penalized forsituations beyond your control or rejected from service, you getdiscouraged,” he may have unwittingly hit the nail on the headwhere combatting illegal entry into the United States isconcerned.

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The illegal alien's situation did not evolve beyond his controluntil after he made the conscious and controllable (in most,admittedly not all, cases) decision to enter the United Statesillegally. As for discouragement, there is probably no better toolto dissuade aliens from illegal entry.

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This is not the place to discuss why the United States cannotsimply open its borders and let anybody come in who wants to come,including the more than one billion people in the world livingbelow the absolute poverty level. Suffice it to say that the dayswhen we were a nation of immigrants, when a German or a Norwegianor anybody else could come through Ellis Island and then simplymelt into the Great Plains, are over for good.

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This letter represents my personal views and has not in anyway received the assistance, approval or encouragement of the HAPOBoard, its chairman, or the CEO of HAPO CCU.

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William R. Clark

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Member, Board of Directors

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HAPO Community Credit Union

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Richland, Wash.

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Editor's note: Neither Correspondent Peter Strozniak nor CUTimes advocated for or against any position relating toimmigration. The story instead sourced the opinions and actions ofcredit union leaders.

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In reaction to Clark's letter, readers with opposing andsupporting views weighed in on social media and on the CUTimes website.

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A reader named Michael wondered if Clark's letter was a signthat credit unions are deviating from their foundingprinciples.

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“It's a rather sad commentary to read that some leaders of ourmovement use politics to make a point,” he wrote. “The point thatshould be raised here is why are so many leaders of credit unionsare moving further and further away from the credit union's coremission, which is to serve and provide affordable financialservices to those regardless of their circumstances.”

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Another reader who identified himself as ChrisCD backed Clark'sposition on not serving undocumented immigrants, saying, “It is anoutrage that people come here and do what amounts to stealing ofthat which they did not earn. Illegals do not come here to becomeAmericans. There are legal ways to become an American citizen.Those wishing to enter our country should follow them. Kudos to Mr.Clark for standing up for America.”

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Another commenter, wildwilly111, questioned Clark's position byproviding a Wikipedia definition, “The illegal entry ofnon-nationals into the United States is a misdemeanor according tothe Immigration and Nationality Act…” before writing this comment:Public intoxication is also a misdemeanor. Does your credit unionrevoke the membership [of] public intoxicants? [Does] it have a “nomisdemeanors” membership rule?

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Reader Gene Bomberg expressed disdain for Clark's remarks. “Thisopinion piece turned my stomach when I first read it this morning,and the feeling hasn't gone away. It's one of those reads that justfeels wrong all the way to my core for so many reasons,” hewrote.

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Some of those “illegal” immigrants you wish to turn away are infact mothers, fathers, and other family members to many militaryservants you laud. I think a far more constructive discussioninvolves a streamlined yet thorough process for turning an illegalimmigrant into a U.S. citizen. Taking a position of encouragingfurther victimization of a class of human beings (furtherde-humanized by calling them “illegals”) already being victimizedis dead wrong,” Bomberg suggested.

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On CU Times’ social media channels, the debatecontinued.

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“If the illegal aliens are earning their money legally why notserve them?,” Alan Knapp, compliance and risk assessment consultantat Knapp Associates, asked.

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Daniel Morrisey, treasurer/CEO at the $2.5 million Queen ofPeace Arlington Federal Credit Union in Arlington, Va., questionedthe assumption of illegal activities.

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“The author of this article seems to conclude that all such‘illegal immigrants’ are guilty of a crime. In other words, theyare all criminals. From what many folks tell me, a great number(perhaps the majority) of such immigrants are not committing orhave not committed a criminal act,” Morrisey wrote. “While use ofthe term ‘undocumented’ may seem to some as minimizing ‘illegal’ or‘criminal’ actions or history, I believe it is more accuratelydescribing or characterizing such immigrants.”

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Another social media follower wondered if Clark's views couldcreate a public relations backlash for HAPO Community CU.

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“A very unfortunate and sad opinion from a credit union boardmember. A remarkable opportunity for reputation risk consideringHAPO's large geographic foot print that is very heavily Hispanic,”the person wrote. “His comments won't sit well with credit unionsand knowing the area, they won't sit well with a majority of thehundreds of thousand consumers living within their large communityfootprint.”

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John Schaefer, director of marketing and business development atthe $148 million Pasadena FCU, wrote, “They’re people. CreditUnions are People Helping People.”

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Read the first counterpoint: Obama'sImmigration Action Could Grow Membership

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Obama's Immigration Action Could GrowMembership

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By Miriam De Dios

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In ahistoric moment, President Obama recently made one of the biggestannouncements on immigration policy since President Reagan’s 1986Immigration Reform and Control Act.

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When he passed executive action Nov. 20, 2014, he made a movethat will affect nearly five million of the estimated 11 millionundocumented immigrants living in the U.S.

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Credit unions that act fast and seize this moment have theopportunity to capture new membership thirsty for financialservices and a trusted financial partner.

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Pew Research estimates a wide variety in state populations ofundocumented immigrants, with more than half of the 2012undocumented immigrant population living in California, Florida,Illinois, New Jersey, New York and Texas. The states of Maine,Montana, North Dakota, South Dakota, Vermont and West Virginia hadfewer than 5,000 undocumented immigrants each in 2012.

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According to the PewHispanic Center, about six million U.S. undocumented immigrantsare of Mexican origin. The remaining undocumented population isprimarily Canadian, European, Asian, Caribbean and Central andSouth American.

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While there are multiple components of this executive action,one component will provide legal reprieve for undocumented parentsof U.S. citizens and permanent residents who have lived in thecountry for at least five years, eliminating the threat ofdeportation and granting them a temporary immigration status.

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In addition, the 2012 Deferred Action for Childhood Arrivalsprogram that allowed young immigrants under the age of 30 whoarrived as children to apply for a deportation deferral will beexpanded. Immigrants older than age 30 will now be able to qualifyfor the deferral, as well, affecting an additional 270,000 people.All of the details of the executive action have not been worked outas government agencies work to implement these initiatives in thecoming months.

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Regardless of the political nuance of this announcement, it hastremendous economic benefits for the country, including more jobcreation and tax revenue. Financial services providers will alsosee new growth opportunities as immigrants seek financial guidanceand tools to help them navigate this process.

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For example, as undocumented immigrants are able to file fortemporary immigration status and receive work authorization, theywill seek new jobs, obtain driver’s licenses and open financialinstitution accounts.

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In fact, a 2013 Immigration PolicyCenter survey of 1,402 young adults approved for the DACAprogram, found that 61% of young immigrants went on to get a newjob, 54% opened a bank account, 38% obtained a first credit cardand 61% obtained a driver’s license.

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Undocumented immigrants will be on the lookout for the rightfinancial partner.

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Prior to receiving their temporary immigration status,immigrants affected by this action will also be saving andborrowing to pay for the expenses associated with the process. Theywill need to pay fees for filing immigration paperwork and taxreturns, as well as to obtain country of origin documents thatmight be needed for the process.

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The DACA filing fee alone is $465, and the renewal fee isanother $465. A family of three that qualifies for the DACA programwill be paying nearly $1,400 to file their DACA applications, notincluding any legal fees an attorney might charge if they seekadditional filing assistance.

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Credit unions are poised to offer dignified financial servicesto undocumented immigrants throughout the immigration process asthey seek to integrate into the financial mainstream.

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Today, credit unions that are already serving their immigrantcommunities can work to expand their community partnerships andnetworks with immigrant service providers. These providers areseeking financial institutions to offer financial education andproducts to their patrons, as they help individuals with theimmigration process.

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Credit unions should be ready to talk about the credit uniondifference, and in some cases, to open savings accounts for thepurpose of paying for the immigration process on the spot at theirpartner’s locations. In addition, people will need loans. Preparingthem today for the lending process with information about how tobuild credit and be a good borrower will be key, especially becausemany individuals will be new to a traditional bankingrelationship.

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For those credit unions seeking to start a growth program, itwill be imperative to evaluate your organizational culture andoperational framework to ensure you are equipped to serve thispowerful new market before starting any outreach.

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Having an inclusive culture and adapting to the market insteadof forcing the market to adapt to your credit union will create arecipe for success. Having a growth strategy will help you be asprepared as possible to serve this new population and buildlong-lasting relationships.

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The sooner you are ready, the sooner this influential new marketcan start to experience the credit union difference and choose yourcredit union as their preferred financial institution ofchoice.

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Miriam De Dios is CEO of Coopera. She can bereached at [email protected].

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More on Why CUs Should Serve the Undocumented : TheBrotherhood of Man in Practice

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The Brotherhood of Man in Practice

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By Scott Butterfield

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William R. Clark wrotelast month that Credit Unions Should Not ServeIllegals, (CU Times, Nov. 5, 2014), a letter that hasbeen on my mind and in my heart the past few weeks as I witnessedLower Valley Credit Union prepare to host the first of itsCitizenship Workshops Dec. 6.

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Through national, regional and community partnerships, LVCUassisted 50 undocumented immigrants in completing the paperworkrequired to file an application for citizenship. More than 88% ofLVCU's members live in a low-income Investment Area and, of those,43% are foreign-born Hispanics.

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Since 1988, U.S. citizenship application fees for naturalizationhave increased 992%, from $60 in 1988 to $595 in 2007. While feesfor adults have remained unchanged since then, citizenshipcertificate fees for children who derive their citizenship throughtheir parents have increased from $255 in 2007 to $600 in 2010.

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Along with fingerprinting fees, the cost for application andfingerprinting for a family of three (two adults and one child)living at the 2013 federal poverty level could cost the equivalentof 10% of the family annual income.

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Undocumented immigrants are not villains. Many want to becomecitizens, and without credit unions willing to step up, they willcontinue to languish at the mercy of predatory financialinstitutions.

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A 2013 CDFI Grant Award of $1.65 million will assist LVCU toexpand its Citizenship Program, which includes the workshops andCitizenship Loans to help finance the cost associated with becominga citizen of the United States of America. The program is expectedto pave a pathway to citizenship for hundreds (potentiallythousands) of currently undocumented immigrants.

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The credit union has been nationally recognized for the creationof this program and for its service of the Hispanic community,including winning the 2014 CU Times Trailblazer Service to theUnderserved Award.

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Serving this community matters – and not just in terms ofdollars and cents. Credit unions have been serving immigrants sincetheir inception. As Miriam De Dios recently pointed out, "Creditunions have an outstanding opportunity to demystify the U.S.financial system for literally millions of Hispanic immigrants andthe second-generation family members who follow their lead. Ofcourse, they have to push past the headlines and the politics thathave tarnished the term immigrant."

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Immigrant and minority communities are growing across thecountry, and, for the most part, they are underserved by mainstreamfinancial institutions. To me, the question isn't should we serveillegal immigrants, but rather, how can we help the outcast membersof our community realize the goal of living and working legally inthe United States?

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Credit unions like LVCU that proactively anticipate the needs oftheir members – as opposed to taking a moral stand against them –are a more relevant part of their members’ lives, providingaffordable access to credit that improves their quality of life andstrengthens the economy.

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Cathie Mahon said it best in her letter, Credit UnionsShould Include Immigrants (CU Times, Nov. 13,2014): "Immigrants are not terrorists. They are often low-wage daylaborers and domestic workers. They are the people who grow andharvest our food. They are members of our communities, activelyparticipating in the economy, who need access to the safe andaffordable products and services that credit unions provide."

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Finally, I would like to quote credit union pioneer Roy F.Bergengren: "The real job of a credit union is to prove, in modestmeasure, the practicality of the brotherhood of man."

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LVCU, and many credit unions across the country, are puttingthat brotherhood into practice every day, and they deserve oursupport, not our political judgments.

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Scott Butterfield is principal at the Seattle-based smallcredit union consulting firm Your Credit Union Partner. He canbe reached at 253-507-2443 or [email protected].

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