YES LIVE: “When you say ‘bank’ to a Hispanic person…”

Credit unions will not succeed with working-poor Hispanics, especially the 18-to-30s, unless they engage with them culturally, according to Ed Gomez, executive director of http://www.elbuen.org/newindex.html, in Austin. That means understanding the essential psychology that drives their everyday behaviors.

As Gomez put it, “Most second, third, fourth generation middle-class Hispanics don’t even speak Spanish. They’re not the Hispanic market, they’re flag-waving Americans," which he pegged as 8% to 10% of the Latin American immigrant population. "The most common 18-to-30 Hispanics are young couples who have been in the United States three to 20 years,” Gomez added.

Serving these people requires understanding the “culture of poverty,” the alien background that prevents people from understanding the “hidden rules of engagement.”

Mainstream Americans intuitively know what’s expected of them in different social setting, for example, what a business casual dress code means. Unless your staff is “culturally competent,” they won’t be able to overcome the mistrust that recent Hispanic immigrants have of institutions.

The model of a culturally competent financial institution? “When you say ‘bank’ to a Hispanic person,” Gomez said, “they say ‘Wells Fargo.’”

The California-based Wells Fargo succeeds with young Hispanics because it hired Hispanic staff, including management, and engaged the market by participating in local community events. It made its presence felt on the personal basis and used the relationships it built with community leaders to design products specifically suited to people who operate outside the majority economy.

Gomez explained, “Hispanics function on a cash basis. People in most Latin American countries don’t trust the government because of a history of monetary devaluations. They fear that financial institutions are going to steal their money.” The cash culture combined with the culture of poverty create the seemingly incongruous but common sight of day laborers flashing large-denomination bills.

“If you have a $100 bill, it shows authority, that you are somebody because you have something,” Gomez said.

Here’s his advice for serving 18-to-30 Hispanics:

• Work through community insiders. As with many immigrant groups, Hispanics form enclaves to preserve their cultural identity. Credit union staff must not only speak Spanish, but also understand the hidden rules of the Hispanic culture. Only by exhibiting real knowledge can your credit union become a household name and a brand that Hispanics trust.

• Build personal relationships. Know children’s names, and the lineage of extended families.

• Design products for people that believe that money is meant to be spent. To working poor Hispanics, Gomez said, the future is the next day you get paid.

• Finally, devise a clear strategic plan to engage with the culture. Take part in local Hispanic events, be a presence on the street and in the churches. The Hispanic community has a strong spiritual base that must be respected if your credit union is going to be accepted.