Innovator Spotlight Interviews
Building Your Language Strategy Webinar
All credit union members and those seeking financial services deserve the ability to communicate with their financial institutions. Easy, right? In reality, many members or prospective members who don't speak English as a first language (or at all) can encounter barriers when trying to access the most basic financial services.
In this webinar, Founder of Language Ventures, Luiz A. Valdez-Jimenez, Esq., MBA has joined Coopera CEO Víctor Miguel Corro to discuss how credit unions can serve linguistically diverse members, and why credit unions should view language as a competitive advantage in serving increasingly diverse communities.
Multicultural USA - An Emerging Marketing Focus
As first seen on CUInsight.com. Authored by Coopera CEO Víctor Miguel Corro.
Multicultural marketing or ethnic marketing involves creating brand awareness to one or more audiences of a given ethnicity—usually an ethnicity outside of a country’s majority culture. Life experiences and background influence how they engage with content, consume products, and buy services. For this reason, brands must consider traditions, languages, customs, beliefs, and experiences when crafting messages. Multicultural marketing focuses on understanding these influences so that outreach and engagement result in an authentic and culturally appropriate mix.
The United States of America, due to its massive size and mixed ethnic heritage, has one of the most complex cultural identities in the world. Millions of immigrants from all over the globe have settled in America, which expands over a vast land mass. The mingling of cultural backgrounds and ethnicities led to a nuanced and complex sense of individual identity. More than 40% of America’s population is identified as multicultural, which basically means non-Hispanic White. This is a fact that credit unions must recognize and understand deeply so that they are relevant to the increasingly diverse population in the country.
Before credit unions begin to build strategy or marketing programs to enhance service to multicultural markets, their first step should be self-reflection. Credit unions may start by assessing the number of multicultural members they have and compare it to their defined field of membership (FOM). Knowing how many African Americans, Asians, Native Americans, Latinos, and other populations they have is essential to craft an outreach strategy to multicultural members. For existing membership, it’s also important to know language preference, the engagement with loans and savings products as well as account balances. Measuring multicultural membership also informs whether the credit union reflects the ethnicities in their FOM and in terms of ethnicity of board, management, and staff.
Knowing these data points and having a strategy to truly address the needs of distinct consumer segments will send a message that your credit union “gets it.” African American consumers may be delighted to learn that their credit union is actively looking to build a branch in a financial dessert, the young Latino immigrant might be interested in the new Spanish-language app while the Asian Americans could want to know of the investment services.
Leveraging this knowledge and having the credit union maxim of financial inclusion and financial well-being for all present is the essence to an inclusive approach to a multicultural membership base.
Illinois Credit Union League and Coopera Partner on Focus Group Study
The Illinois Credit Union League and Coopera partnership to advance financial inclusion will enter a new phase in 2022. The organizations will work together on identifying and bridging gaps, enabling Illinois Credit Unions to offer financial products and services to benefit underrepresented consumers across the state. In 2019, the partnership produced a demographic research study focused on the growing diversity of Illinois, helping Illinois credit unions identify areas of opportunity to advance financial inclusion.
State Credit Union Leagues and Associations are uniquely positioned to lead change and advocate for deep financial inclusion for all. “The focus group study builds on the valuable research we’ve already gathered, delving deeper for even greater insights that will support the financial inclusion efforts of Illinois credit unions,” says Tom Kane, President/CEO of the Illinois Credit Union League. “This partnership with Coopera shows our credit unions where they can make a difference, how they can better serve their members and help them meet requirements of the new Illinois Community Reinvestment Act (CRA).”
Beginning in Q2 of 2022, Coopera will host three focus groups of Illinois residents across the state. Illinois credit unions will select among their potential and existing members. Participants will discuss their engagement, awareness and financial pain points. The research will be used to assist Illinois credit unions to find outreach gaps from a cultural perspective. Data collected could be used to collaborate on new culturally appropriate products and services, as well as find innovative ways to serve existing and new members.
“Hearing directly from the community is fundamental in driving financial inclusion work,” says Coopera CEO Víctor Miguel Corro. “We’re excited to get started on this meaningful project and to help Illinois credit unions outline their plans for more inclusive service to their members and underrepresented communities.”
The focus group project is anticipated to be completed by year end.
From DEI Statements to Impactful Change - Notes From the Field
As first seen on CUInsight.com. Authored by Coopera Director of Diversity, Equity and Inclusion Jennifer Santos Esperanza.
“What people say, what people do, and what they say they do are entirely different things.” – Margaret Mead
In the quote above, anthropologist Margaret Mead succinctly articulated what she observed across a variety of cultures. While her research took place close to a century ago, her observations still ring true: whether in a small community in the South Pacific, a collective group of workers in Indonesia, or a corporate boardroom in North America, we don’t realize that there is often a disconnect between what we say we do, versus what we put into practice.
Organizations, including credit unions, are often guided by a mission statement to provide a guiding star to direct their efforts toward a common set of goals. The mission statement serves as a form of collective accountability, articulated with a brief but inspiring message. This is especially true as credit unions strive to be more intentional about increasing their multicultural staff and membership base.
A strong mission statement can ideally provide credit unions structured guidance for implementing new marketing strategies, establishing ERGs, and developing new products and services that speak to the tenets of diversity, equity, and inclusion. While this is a good start, is there a way for credit unions to ensure that what they are saying and what they are doing are closely aligned?
Holistic and Data-Driven Approaches
A holistic, integrated diversity, equity, and inclusion (DEI) strategy can play a key role in ensuring credit unions practice what they preach. As DEI consultants and dedicated staff members work to ensure consistency in messaging, it is important to ensure that they are also doing the following:
Implementing regular trainings and learning opportunities for the credit union to understand both the business and moral cases for DEI
Ensuring that operations and support staff are culturally diverse, and where relevant, are bilingual
Implementing a data-informed approach that monitors key indicators across the years, and across various units/departments. Data can include (but is not limited to):
Employee engagement surveys
Staff recruitment and retention statistics
Membership analysis of the diversity within the field of membership
Equity audits of both internal and external operations
Cultural/linguistic analysis of promotional materials to ensure cultural relevancy
Cultural/spatial analysis of credit union spaces to ensure physical accessibility
Cultivating partnerships and activities with community stakeholders
Creating pipelines for diverse talent to develop their professional skills for retention and advancement to leadership roles
Culture Change and Adaptation
A holistic, data-driven DEI plan is even more crucial as we begin to witness a wave of credit union mergers over the next few decades. Because mergers are especially integral for the survival of smaller credit unions, the need for a sustained and holistic DEI strategy is even more crucial. Credit unions take great pride in the internal cultures they’ve built throughout the years—but what are their plans for merging two organizational cultures? Have newly combined credit unions conducted assessments on the changes to the demographics of their membership base? How might members’ financial needs be different? Ideally, DEI consultants have enough of an outsider’s unbiased perspective, similar to an anthropologist’s, to tackle these questions.
According to a recent study from Filene Research Institute, DEI implementation is most effective and results in higher ROI when strategies are implemented as part of a “bundle:” sets of complementary practices that operationalizes a credit union’s commitment to DEI. More specifically, credit unions are most successful when they go beyond sharing their mission statement, and actually work to achieve their mission: tracking data over time, setting goals for internal and external best practices, and implementing strategies that align message with practice.
National Credit Union Foundation Announces $100K Grant to Support Credit Union Diversity and Financial Health
MADISON, WI (October 7, 2021) - The National Credit Union Foundation (the Foundation) has announced a $100,000 grant to help smaller credit unions analyze membership demographics and better understand the roles culture, race and ethnicity play in financial well-being.
The grant will be split among multiple credit union recipients, giving them access to industry-leading programs, data analysis and consultation provided by Attune and Coopera, two organizations leading the charge for multicultural inclusion and financial health.
“The persistent financial inequities faced by people of color have been laid bare over the last few years,” said Gigi Hyland, executive director of the National Credit Union Foundation. “Credit unions were founded to support those most in need but to do so effectively, they need to understand who their members are. This grant will open up that opportunity for credit unions that could otherwise be unable to allocate the human and financial resources.”
Successful applicants will have the opportunity to use two of Coopera’s inclusion tools: the Ethnicity Segmentation Analysis to track membership demographics, and the Hispanic Opportunity Navigator, which assesses a credit union’s readiness to serve Latinx communities and provides a roadmap to success. In addition, grant recipients can partner with Attune to measure employee and member financial health and receive data-driven insights to steer strategic planning and product development.
Coopera CEO Victor Corro added, “An effective deep inclusion strategy needs to be based on data analytics to truly include the most vulnerable and financially excluded consumers. Coopera is honored to support those credit unions looking to go beyond the dialogue and get to the action in diversity, equity and inclusion through data.”
John Thompson, co-founder and president of Attune, said, “In order to address the problems of financial well-being, credit unions need to first understand where members and staff are at in their individual financial well-being journey. We're excited to bring the power of the Attune measurement platform to bear, enabling more credit unions to improve financial well-being for all.”
Credit unions composed of 10 or more employees with assets between $100 million and $600 million are eligible to apply for the grant.
Full grant and application information is available here. Applications must be sent to Traci O’Neill by close of business, Friday November 5, 2021.
Partnerships, Alliances and Collaborations are Essential to Inclusion
As first seen on CUInsight.com. Authored by Coopera CEO Víctor Miguel Corro.
My 20+ years in credit unions has taught me that to build something you need the help of others. It may seem obvious, but sometimes collaboration does not come spontaneously – even if our financial cooperative space is defined by the strength of coming together to build, improve, grow, include, and belong.
Providing equal access to opportunities and resources for people who might otherwise be excluded or marginalized is best done by asking others to join in. In credit union land, we call this cooperation. And the disposition to build great things via collaboration is, in addition to one of our principles, needed.
Advancing diversity, equity, and inclusion (DEI) work is best approached through collaboration. This requires the lived experiences, perspectives, viewpoints and opinions of people who normally wouldn’t mingle organically. If done deliberately, collaborations result in increased credit union inclusion and a culture that appeals to broader emerging consumer segments.
Collaboration with Members
It is important to establish a genuine feedback mechanism with historically excluded communities. Everyone needs financial services, and understanding the barriers and the way in which our organizations can unintentionally exclude is essential to add interventions for change. How can we ensure that saying “all are welcome here” is true? Start by asking your members about their journey, experience, and overall relationship with you. Tellers, loan officers and contact center staff have a courtside seat to direct, candid member feedback – especially for members who come from communities of color.
Collaboration with Community-Based Organizations
To reach excluded communities, we need to be deliberate and patient to gain trust. Credit unions need to invest time and resources to create awareness and, ultimately trust. This is best accomplished by surveying and approaching nonprofit and other community-based organizations. These organizations may work with recent immigrants, non-English speakers, those experiencing homelessness or unemployment and other marginalized communities. Credit unions can add value to these trusted organizations by sharing financial well-being resources. A community that experiences the collaboration will invariably end up trusting the credit union.
Collaboration Within the Credit Union System (Industry, Movement, Family, Space)
Forming the CU DEI Collective is taking some time, but it has been a rewarding exercise. We have found strength in coming together to build a more inclusive credit union system. Supporter organizations have realized that they cannot go it alone when it comes to inclusion, belonging and DEI. DEI is good business, and investing in it results in more people finding a place where belonging means financial well-being. As a highly inclusive organization, the credit union movement needs to be more than just a sum of its parts. Obviously, it’s great to count on individuals working on their own initiatives, but to really make amazing things happen and to exceed the norms of what is expected, collaboration needs to be nurtured and allowed to blossom.
Coopera Consulting Enhancing DEI Efforts for Credit Unions
As first seen on CUBroadcast.com.
"Coopera Consulting CEO Victor Corro and Coopera Consulting Director of DEI Jennifer Esperanza (who has a Ph.D in Anthropology) joined us on the show to share latest activities at Coopera -- especially in the DEI area, where they are enhancing their efforts to help credit unions nationwide." - CU Broadcast
Put DEI & Compliance Heads Together to Advance Financial Inclusion
As first seen on CUTimes.com.
While financial inclusion has been an organizational imperative for credit unions since the industry’s inception, more strategic attempts at bringing diverse members into the banking mainstream are taking root across the movement. Many market realities are driving a renewed sense of purpose around this imperative, not the least of which are the ongoing economic pains of COVID-19.
It’s not uncommon for financial inclusion programs to get stalled by the perception of too much risk and compliance barriers. It’s human nature to protect from the unknown. Culturally in the U.S., people are cautioned against talking about tough topics, like income, politics and religion, which can also be a hinderance to advancing financial inclusion strategies. After all, if we cannot even talk about it, how can we get deeply into it?
These are among the reasons strong collaboration between those leading the financial inclusion charge and those monitoring compliance is crucial to the success of any endeavor that seeks to do things differently.
Rethinking Conventional Wisdom
Perhaps no two leaders within an organization have quite as divergent points of view as the chief compliance officer and the chief DEI officer. Or at least that’s how the story goes. We tend to think of compliance leaders as gatekeepers and risk avoiders – sentries that stand at the proverbial door of the credit union protecting it from harm. At the same time, we often consider DEI champions as welcomers who think in terms of possibilities and potential, not threats or exposure. In reality, however, these two kinds of leaders are just like everyone else. They have nuances that come from personal experience, studied expertise and individual passions. Bringing the two forces together is how a credit union can transform its financial inclusion strategy from aspiration to reality.
When you think about it, both the DEI officer and the compliance officer have a common desire to make the credit union sustainable into the future so that it can fulfill its mission of providing access to financial services to its community. This translates directly to inclusion. With a thriving credit union, consumers will have greater financial services and a stronger financial well-being. That translates into a stronger community.
Doing so may not be easy. After all, people wearing compliance and inclusion hats are each coming at their jobs from unique points of view. But isn’t bringing different perspectives together at the core of all DEI strategies, including financial inclusion?
If you’re looking for ways to inspire stronger collaboration between risk and compliance and DEI teams, here are a few things to try.
Key Ways to Cultivate DEI and Compliance Synergy
Start at onboarding. Many organizations across sectors are hiring chief DEI officers and other similar leaders, and credit unions are among them. Compliance folks don’t always make the short list of leaders who newbies meet during the first week. Consider shaking things up for your new DEI leader. Setting a vision-sharing meeting with risk and compliance early on can be an effective way to kickstart long-term collaboration.
Include risk and compliance in innovation. In addition to being overlooked during new-employee orientation, risk and compliance leaders are often left out of product and service innovation talks until colleagues need their final sign off. If the new product or service was designed without controls, that can put the compliance leader in the unenviable position of traffic cop. Financial inclusion champions are hired to do things differently – to innovate outdated processes and try new things. Allowing to design these new experiences in lockstep with risk and compliance gives them a much better chance of launching on schedule.
Let DEI champs see weaknesses. Arguably more than anyone else at the credit union, compliance leaders know where the gaps are – from employee adherence to procedures to risk exposure in lending. Helping DEI leaders see them as well not only avoids exasperation of an existing problem, it builds trust between compliance and DEI teams. No one likes surprises, especially if that surprise derails progress in an area as important as financial inclusion.
Become allies for change. Nothing cultivates camaraderie faster than tackling (and solving) a tough problem. It’s not improbable to anticipate a DEI officer with a big vision for financial inclusion coming up against an unnecessarily narrow policy or procedure that threatens to halt progress. Because they carry authority and trust with the board and other decision makers, risk and compliance leaders can be an effective advocate for their DEI colleagues’ request for change. Similarly, a DEI officer can help a compliance leader push for evolution of outdated policies by helping establish a doing-well-by-doing-good business case for change.
Learn together. The credit union movement, like many other sectors, has a lot of opportunity to improve in terms of diversity – in staffing, board representation, membership and product/service delivery. Connecting non-traditional and underserved communities to the mainstream financial system is a big undertaking and one that will require continuous evaluation and improvement. Committing to helping each other learn along the way and encouraging each person or team through missteps is a great way to ensure progress over perfection.
Financial inclusion, as well as other aspects of DEI, is a journey, not a check list. It requires ongoing attention and collaboration.
While not every credit union has a chief DEI or chief compliance officer on staff, chances are someone has been assigned (or taken ownership of) these distinctive areas for the cooperative. Finding creative ways to inspire collaboration between them will not only grease the wheels of a financial inclusion program, it will also show your community its credit union is walking the walk of DEI.
Why Credit Unions Should Consider DEI Programs and Multicultural Markets
As first seen on CUInsight.com.
U.S. census projections estimate that racial minorities will be in the majority by the year 2045. By that time, Whites will comprise 49.7% of the total population, while Hispanics/Latinos, Asians, Black/African-Americans, Native American and multi-racial individuals will make up the remaining number– essentially becoming what has been referred to as the new “minority majority.”
Diversity, Equity, and Inclusion (DEI) programs have proliferated across the country over the last decade, largely in response to this demographic shift. Industries including finance, education, healthcare, and policy have turned to DEI specialists to identify and implement strategies on how to attract new members from multicultural markets. Such programs, if comprehensive, can also help credit unions diversify and train their staff to meet the needs of its members with empathy and cultural sensitivity.
Yet in many ways, implementing a DEI approach is long overdue: certain minority populations have struggled over decades with financial service providers to be included in opportunities for entrepreneurship and intergenerational wealth. Cultural biases and linguistic barriers are a few examples of how certain demographic groups have not been able to achieve their fullest potential. In other words, a DEI approach can help credit unions uncover the financial success stories within their communities that might be hidden in plain sight. It can also help the credit union keep its purpose to constantly look for ways to be inclusive and provide access to financial services.
With the right mix of intention, strategy and commitment, credit unions can effectively demonstrate their cultural relevance with segments of various multicultural markets they most want to reach. Becoming both personally and culturally relevant to these growing and influential groups begins with a deep knowledge of the people who comprise them. Credit unions must understand who their prospective members are and who they aspire to be; what they value, appreciate and desire; and how they prefer to interact with the brands in their lives. Without this knowledge, it is extremely difficult to demonstrate respect, interest, or willingness to go beyond the usual to meet your prospect’s needs.
Let’s explore the two fastest growing communities in the country, the Hispanic and Asian segments.
The Hispanic Market and DEI
Reaching U.S. Hispanics by simply translating forms, disclosures and websites into Spanish is not nearly enough to connect with them. It is important to know that this audience is often bilingual and acculturated in various degrees to the U.S. Yet, the vast majority of Hispanics are U.S. citizens. About 79% of Latinos living in the country are U.S. citizens, up from 74% in 2010. This includes people born in the U.S. and its territories (including Puerto Rico), people born abroad to American parents and immigrants who have become naturalized citizens. This U.S.-born Hispanic market is very much a distinct market from the foreign-born immigrant Hispanics. This important distinction is fundamental to knowing how to connect with this diverse community. Knowing your audience through analytics should inform strategies and tactics to appeal to immigrant and U.S.-born Hispanics.
The Asian Market and DEI
Similar to the Hispanic market, outreach to potential members of Asian descent requires an understanding of the diversity of this racial category and their various experiences in the United States. Around 23 million people in the U.S. identify as Asian, whose heritages can be traced to 20 different countries, and whose circumstances of settlement in the U.S. are even more varied. There are Asian-Americans whose ancestors settled in the U.S. four or more generations ago. Some may have come as university students and remained in the U.S. to embark on a new life. Other groups, such as Cambodian, Vietnamese, or Hmong arrived as refugees—fleeing their war-torn countries because their lives were in danger. Some groups, such as Filipinos, may have arrived as contract teachers or nurses, when the U.S. labor force found itself in short supply of these skilled workers beginning in the 1970s.
According to a recent study by the Pew Research Center, by the year 2055, Asians are projected to become the largest immigrant group—surpassing Hispanics. By that time, Asians are expected to make up 36% of all U.S. immigrants, while Hispanics will make up 34%. How have credit unions equipped themselves to serve Asians, and do they feel confident in being able to provide the products and services that can help them achieve their financial goals?
Knowing Credit Union History
While it may seem daunting, a DEI approach to multicultural markets need not begin from scratch. Because credit unions have had a long history of championing the financial aspirations of underbanked/underserved populations, adding DEI strategies to a credit union’s existing practices are essentially a continuation of the credit union legacy.
What must come into play, however, is a thoughtful approach to DEI work; one that ensures that its implementation is holistic and sustainable. As leadership consultant and DEI researcher Aiko Bethea often speaks about, DEI work is transformational, not transactional work. If done correctly, it requires organizational culture change that can be the catalyst for credit unions to flourish in ways that they may not have anticipated.
Leadership is especially integral in the process—communicating to all stakeholders within the organization that DEI work means getting to know the constituencies they serve and finding pathways for employment so that credit union staff can better reflect the community’s demographics. Leadership teams should rely upon specialists who are adept at interpreting analytics and who are well-versed in histories and theories of multiculturalism.
Credit unions have a mission to include financially. This is a clear definition of having a higher purpose: serving as community development change-agents by leveraging the voices and lived experiences of many.
How to Connect with Hispanic Consumers in 2021
Credit unions used to depend on social events to connect with their Hispanic community – events such as Hispanic Heritage Month festivals, financial education seminars, etc. In the era of social distancing, credit unions have been challenged to find new ways to connect with their members through digital platforms. Here are three recommendations for ways to engage with the Hispanic market in 2021:
Get comfortable in front of the camera.
Today, one of the most engaging ways to promote a product or service is through short videos like TikToks and Reels. According to Clarita’s 2020 Hispanic Market Report, 23.4% of the U.S. millennial population is Hispanic. By 2025, 27% of the U.S. Gen Z population will be Hispanic. These two segments are in their prime borrowing years. Therefore, credit unions must go to where potential new members are consuming the most information, so consider joining TikTok or Instagram.
While the millennial and Gen Z populations may not be your target market at this moment, it would be beneficial to include them in your marketing strategy. These are two populations that need financial services. Gen Z for example, might not be attending your financial seminars on Zoom, but you could catch their attention with a minute-long video on one of their favorite social platforms.
Make online banking enrollment accessible.
One of the most common questions Coopera received from credit unions embarking on a Hispanic growth strategy is, “How tech savvy is this community?”. There is a misconception that Hispanics don’t use technology at similar rates as compared to other demographics. Contrary to belief, most technology reports suggest otherwise. Claritas found that Hispanic consumers are more likely to carry out day-to-day banking transactions online. This is not surprising to me, as I have witness members of my own family utilizing their smartphones to stay connected with our family in El Salvador and to make everyday purchases.
When Hispanic members have low online banking and mobile app penetrations, I attribute the lack of engagement to communication issues in regard to the availability of those digital options. Spanish-speaking members may not be aware that they can enroll in online banking, or that their credit union has a mobile app for members. Consider these questions:
Do you have an online banking enrollment guide?
Is this guide available in Spanish?
Do you have a Spanish microsite available to members?
How have you promoted your Spanish content online?
Do you post in Spanish on social media?
What would be the investment to translate your online and mobile to Spanish?
Check out Valley Strong Credit Union, who took it a step further by creating a Spanish Facebook page to ensure their information was accessible to a Spanish speaking audience.
Prepare for potential members’ due diligence.
It is important that your online messages align with how you want to be known among the Hispanic community. Whiles Hispanics are loyal to brands, it takes some time to earn their trust. For a long time, Hispanics have relied on word of mouth to learn about resources in their community. Without social gatherings, it is important that you spread positive messages about the credit union online. Encourage members to leave a review online about their experience with the credit union, especially reviews in Spanish. This would present the diversity of your membership and their satisfaction with the credit union.
Don’t let COVID-19 hold your credit union back from engaging with Hispanic consumers. Use this time as an opportunity to enhance your digital channels to welcome new users. Online outreach and engagement can drive membership growth and product penetration if done from an inclusion mindset.
Compliance Holds Your Passport to Greater Financial Inclusion
By helping reevaluate the rules, the regulatory experts at your CU can open entirely new pathways for entirely new members.
COVID-19 made life extraordinarily difficult for a lot of people in ways they never anticipated. Adults that had never experienced a job loss, an inability to pay their bills, even homelessness or food insecurity, found themselves navigating unfamiliar financial territory. Many are still very much in the throes of their struggles and searching for support and resources.
Credit unions were built to offer hope in exactly these circumstances—to give their neighbors, all of whom were traditionally excluded from banking services, a safe, trustworthy way to access financial resources—especially during times of economic downturn.
That said, credit unions must also keep themselves out of financial trouble. Doing so requires them to adhere to a set of rules and regulations. It’s a rigorous, complex process made possible by the establishment of policies and procedures that leaders can train staff to follow. The trouble with many of these policies and procedures is they are built to address the mainstream, the traditional, the usual.
But, if we learned anything in 2020, it’s how quickly the usual can change.
Reevaluating the Rules
As the industry confronts a new normal in which members’ needs—and members themselves—begin to look different, compliance and risk leaders have a sizable opportunity to contribute. That’s because they are the chief owners of policies and procedures, not to mention the resident experts on all things regulatory in nature. By helping colleagues reevaluate the rules they’ve been following, compliance and risk leaders can open up entirely new pathways for entirely new members.
This is particularly true for consumers struggling with pandemic-related impacts that have pushed them out of mainstream financial services.
Expanding What’s Permissible One Policy at a Time
Take an individual who is experiencing homelessness, for example. Especially as economic forecasters warn of a foreclosures wave due to the pandemic’s impact on jobs, this is a circumstance that credit unions must be prepared for. Account opening procedures mandate that a credit union collect a physical address, which could be difficult for a prospective member experiencing homelessness to provide. Compliance and risk pros can review existing polices to be sure they encompass the full scope of permissible physical addresses. For instance, Title 31 Chapter X concerning customer identification programs states that an address must be collected. However, the regulation also allows for individuals without an address to provide one belonging to next of kin or of another contact individual.
Acceptable ability-to-pay documentation is yet another area compliance and risk leaders can help credit unions adapt for a broader range of assistance to a broader group of people. Methods and technology for evaluating creditworthiness are evolving, and plenty of alternative providers are taking advantage of them to prey on desperate people turned away by banks. With guidance and support from compliance and risk colleagues, credit union lenders and their teams can use the same strategy, except for good.
Members who are not U.S. citizens are another group of people in great need of financial assistance and guidance as the nation moves toward COVID-19 recovery. Many were left out of the stimulus package relief because of the lack of a Social Security number. Higher degrees of poverty and a higher level of employment in jobs that can’t be done remotely has put immigrants and their families at higher financial (and health) risk during the pandemic.
Compliance and risk pros can reevaluate policies and procedures to ensure identification forms other than a Social Security number are not only allowed but welcomed. A major part of executing an inclusive approach is going beyond acceptance to enthusiasm. If credit union staff are familiar with and comfortable checking international passports, ITINs or Matrícula Consular ID cards, for example, they are much more likely to nurture a welcoming atmosphere for people who want to join the cooperative.
Reengineering Escalation for a Better New Member Experience
Speaking of a welcoming atmosphere, compliance and risk leaders can have an impact in this area by helping design an escalation process that feels smooth and hospitable. When frontline staff understand what to do and to whom to go when they are presented with an unfamiliar form of identification, the prospective member feels accommodated and accepted. Particularly in underserved, close-knit communities, that kind of experience can kick off a highly successful word-of-mouth campaign that brings many new members to the credit union’s doorstep.
Involving Compliance and Risk Early On
Change is hard for many people, and it can be even harder when hindered by fear of running afoul of the law. This is where experts in regulatory compliance can step in. For those leaders to have the greatest impact, however, they should be involved in strategic discussions around growth and evolution as early as possible. It’s not uncommon for a credit union to build a financial inclusion plan without the upfront input of their compliance and risk folks. This, unfortunately, perpetuates a misguided stereotype compliance pros continuously battle—that they lead the “No” department. Getting these folks involved from the outset ensures financial inclusion programs are in alignment with the credit union’s regulatory obligations and strategic compliance aspirations.
Keep in mind, too, that compliance and risk leaders can serve as influential champions of inclusion. Because they touch so many areas of a credit union’s operations, they typically have a large internal network. Allowing them to be a part of developing a financial inclusion strategy and associated program may mean more team members see the value of the initiative and get involved to an even greater degree than expected.