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Southwest 66 CU Developing New Strategies and Tools to Engage Consumers of the Future
Tuesday, June 3, 2014 6:45 AM

As the United States shifts to a majority-minority population over the coming decades, a new report, “Banking in Color: New Findings on Financial Access for Low- to Moderate-Income Communities,” reveals the necessity of credit unions and other financial institutions to develop new strategies and tools to engage the consumers of the future: communities of color. And credit unions like Southwest 66 CU are doing just that.

Authored by the Alliance for Stabilizing our Communities (ASOC)—including National Coalition for Asian Pacific American Community Development (National CAPACD), National Urban League (NUL) and NCLR, “Banking in Color: New Findings on Financial Access for Low- to Moderate-Income Communities,” notes a number of potential opportunities for financial institutions to improve banking for low-income consumers. For example, although the majority of participants surveyed had a checking or savings account with a traditional bank, they tended to avoid the rapidly expanding online and mobile banking platforms in favor of face-to-face transactions, due to security concerns. And while 60 percent of respondents reported owning at least one credit card and using it regularly, less than half of respondents knew their credit score.

While low-income families are trying to save, they remain vulnerable to emergencies as they try to replenish the savings cushion they lost during the economic downtown. Although more than half of individuals surveyed said that they save via deposits into a savings account, few said that they would have enough money to cover unexpected expenses or emergencies.

Southwest 66 CU understands how important it is to offer the right product/service mix to help families respond to unexpected emergencies. Earlier this year, the credit union was selected to participate in the Filene Research Institute’s “Borrow and Save” Incubator. One of four products to be tested, Borrow and Save was developed to increase the economic security of low- and moderate-income credit union members by providing a small dollar loan product with a built-in savings component that can help break the cycle of high-cost, repeat borrowing.

The credit union also participates in the Internal Revenue Services’ (IRS) Volunteer Income Tax Assistance (VITA) initiative. The VITA program offers free tax help to low- to moderate-income individuals who cannot prepare their own tax returns.

“I’m often asked how we reached the underserved and unbanked demographics, and my response is always the same…with hard work and good partnerships,” Southwest 66 CU CEO Sean Cahill tells the Leaguer. “There is no secret ingredient to be successful.  You have to be out in the community to understand the community. And you have to find key contacts that you can partner with in the community that can further advance your stated mission.”

In 2013, Southwest 66 CU received the Cornerstone Credit Union League’s Juntos Avanzamos (Together we Advance) designation. This designation is awarded only to those credit unions who demonstrate they have the capacity and the infrastructure to serve the Hispanic community. There are currently 26 Juntos Avanzamos credit unions.

“One of the best things our team has done was to work with the Cornerstone League on obtaining our Juntos Avanazamos designation. Just the application process by itself was a great resource to ensure we were doing the right thing to serve our members in this community.  It made us look hard at how we were doing business, and greatly improved our delivery to the market.  Plus having a flag out front announcing ‘Together We Advance’ is an incredible statement to the market,” adds Cahill.

When the credit union realized the importance of assembling a Hispanic Advisory Board, they turned to the community. This Hispanic Advisory Board is made up of influential community members that really understand the market, and what was needed from the credit union. And according to Cahill, this group of community partners regularly reports to both the board of directors and staff on product and service needs in the Hispanic community.

Among the credit union’s products/services line-up are Quinceañera and citizenship loans. They also offer an affinity debit card program, and are currently working on developing a micro website that will be in Spanish.

“Our board of directors knows how important the Hispanic demographic is to our future growth and prosperity,” Southwest 66 CU CEO Sean Cahill tells the Leaguer. “They also recognize how critical it is for families to have that relationship with a financial institution in order to achieve greater financial security.”

Based in Odessa, Texas, Southwest 66 CU was chartered in 1949 as Odessa 66 CU to serve the employees of Phillips Petroleum Company. It was in 1997 that the credit union changed its name to Southwest 66 CU. Recognizing the transformation of its community and the need to diversify its membership, the credit union is now a community charter, serving residents of Ector and Midland counties. Southwest 66 CU is also a low-income designated credit union.

“Understanding the importance of evolving with the changing demographics in our community is a top priority for our board of directors at Southwest 66 CU,” notes Cahill. “Our community looks very different today than it did 65 years ago when we were first chartered, and so we must change our approach to serving our more diverse membership.”

“We cannot afford to remain stagnant when our community is growing at such a rapid pace. We need to constantly evaluate and look to meet the needs of our community,” adds Aaron Chavez, assistant vice president of marketing with the credit union. “It is our mission to keep true to the credit union motto – we want to help people, by providing products that are relevant to their needs.”

In order to guarantee the future economic stability of this nation, the authors of the “Banking in Color: New Findings on Financial Access for Low- to Moderate-Income Communities,” report say we have to get our communities on a path to financial security, which begins with identifying the information and tools that they need to bank better.