Used-car lots can advertise – “Bad credit? No problem!”
Banks and credit unions, however, have more rules to follow than car dealers when trying to reach the underserved and poor.
Generally, they don’t use direct mail or billboards. Instead, they work with community and nonprofit groups, which funnel the so-called under-banked to their branches and websites.
They do outreach, including holding seminars on financial education and for first-time homebuyers. And they provide products with no or low fees, hire bilingual staff and offer materials written in Spanish.
Underserved customers have low or variable income, poor credit or live where it’s tough to access financial services. Yet financial leaders agree they want to serve more people with low income. They know these people often grow their careers, become financially stable and become long-term, good customers.
“Most start at a low income and build up,” said Joseph E. Schupp Sr., vice president-Community Reinvestment Act officer at Customers Bank.
Fulton Bank uses more than advertising to reach “underrepresented residents,” Nicole Wamsley, senior communications consultant, wrote in an email.
“With Fulton’s relationship style of banking, we have a broad view of marketing that goes beyond what one would think of as traditional advertising,” she said.
That includes working with independent organizations which inform residents about financial services. Fulton works with Centro Hispano, Neighborhood Housing Services of Greater Berks and Neighborhood Housing Services of the Lehigh Valley, for example. Fulton is the parent company of Bethlehem-based Lafayette Ambassador Bank.
“We are also a member of the Berks County Latino Chamber and the Hispanic Chamber of Commerce of the Lehigh Valley,” Wamsley said.
Wells Fargo spokesman James Baum highlighted an ad for a free financial-education program.
The ad featured a young woman looking at her phone on the beach, with a caption in Spanish: “We help you prepare for financial success.”
“While we certainly do advertise, our outreach to the under-banked population is enhanced through our extensive work with local nonprofit organizations that help underserved communities of all types,” Baum said.
Those include financial coaching through the United Way Financial Capability Network and work with the Cities for Financial Empowerment Fund, a nonprofit advisory organization.
Discovery Federal Credit Union relies on lower rates on loans, fewer fees for basic services and higher yields on savings to attract members of low-income communities and the under-banked, Tara McQuillen, director of marketing, wrote in an email.
“However, we do not currently have anything [advertising material] specifically just for this market,” she said.
That approach generally reflects the websites of financial institutions.
For example, a scan of websites of eight local banks and credit unions turned up no memes or buttons targeting low-income people. They did, however, focus on topics such as student loans – including refinancing student loans – car loans, credit cards and mobile apps.
In-house, Fulton has a team devoted to community outreach and engagement, whose “particular focus is on building relationships and partnerships in underserved and under-banked communities,” Wamsley said.
“We also have a team of mortgage loan officers who focus on helping people in underserved communities purchase their first home.”
Fulton has held first-time homebuyer seminars in Spanish in the Lehigh Valley and Reading areas, she said.
Michael Wishnow, senior vice president of marketing and communications for the Pennsylvania Credit Union Association, said a credit union’s mission is to reach out to all members of a community.
Credit unions also work closely with organizations in the community that funnel good prospects to the branches, he said.
This works much better for underserved prospects than direct mail or online applications, which lack a personal touch.
The association uses general commercials that are “racially ambiguous” and also don’t focus on high-end products such as wealth management, he said. For example, one features a single mom who wants to go to law school.
Most banks and credit unions in the region understand the need for Spanish-speaking staff, Wishnow said.
“Some do it better than others, to be frank,” he said, adding that most have bilingual tellers and written material in Spanish.
Customers Bank has a “select language” button on its website, and Wells Fargo has a button at the top for Spanish translations. Customers Bank has a bilingual mortgage originator, Schupp said.
Fulton runs ads and publishes a monthly financial-education article in “El Palo,” a Spanish language magazine in Reading.
It’s important to understand cultural differences, Wishnow said. Some people in underserved populations might have grown up in countries where banks were less regulated, lacking deposit insurance, for example. That means they might be suspicious of banks.
“Trust needs to be built,” he said.
Schupp said news about Customer’s mortgage services is often spread by word of mouth.
“They tell their friends, and they come back to you,” he said.