Fledgling Toledo credit union keeps hope despite headwinds

10/21/2012
BY JON CHAVEZ
BLADE BUSINESS WRITER
Exterior of the Nueva Esperanza Credit Union.
Exterior of the Nueva Esperanza Credit Union.

On a typical morning last week, Sue Cuevas was at her desk at Nueva Esperanza Community Credit Union doing what she does best — redefining the word “multitasking.”

One moment she was sorting through credit union documents while simultaneously answering a reporter’s questions.

The next, she was processing two financial transactions simultaneously for clients, conducting one conversation in English and the other in Spanish.

“I have a title that says ‘CEO’ but trust me, that is all it is. Just a title,” she said cheerfully while preparing to move onto her next few tasks.

A former branch manager at Farmers & Merchants State Bank in Defiance, and a mortgage lending officer with Fifth Third Bank, Ms. Cuevas previously experienced the luxury of running a financial institution that featured both staff and resources.

“I was used to, ‘OK, I need marketing materials. Call the marketing department.’ And I never had to worry about compliance issues because we had a compliance department; I never had to worry about IT because we had an IT department,” she said.

Now, as the head of a fledgling credit union with just a two-person staff, it falls on Ms. Cuevas to be whatever is needed: chief executive officer, teller, collections officer, IT person, marketing chief, accountant, even the maintenance staff.

But she does it all cheerfully because she passionately believes the credit union, located in a small, discreet office at 1232 Broadway, is making a vital difference in the Toledo area’s Latino community.

While she isn’t on a mission from God — even though her father was a pastor — her intense desire to make the credit union succeed is fueled by passion.

“It was instilled in us [as children] that you always have to make a difference, no matter what you do,” Ms. Cuevas said. “You have to believe in something to let it become a reality.”

However, Nueva Esperanza, which means “New Hope,” would test the patience of Job.

Sue Cuevas, president/CEO of the Nueva Esperanza Credit Union.
Sue Cuevas, president/CEO of the Nueva Esperanza Credit Union.

Chartered in May, 2010, and opened in the spring of 2011 with $1.3 million in deposits and $180,000 in start-up capital, the credit union has grown slowly compared to most credit unions.

According to financial data firm BauerFinancial Inc. of Coral Gables, Fla., from its start-up through June, 2012, Nueva Esperanza has attained just 292 members and total assets of just under $1.5 million.

By contrast, the area’s largest credit union, 59-year-old Directions Credit Union in Sylvania, has 70,000 members and assets exceeding $500 million.

Its small size and slow growth has hampered Nueva Esperanza. State regulators won’t allow it to offer certain services — such as home loans — or even extend its operating hours until its membership base and asset pool grow.

State regulators have even commented in reports that they think the credit union should be bigger by now.

But Ms. Cuevas, a Fulton County native who resides in Archbold, shrugs off the criticism by pointing out that Nueva Esperanza is not like any other credit union in the state.

“In the state of Ohio we are the first Latino credit union and designated a Latino credit union,” Ms. Cuevas said. Further, Nueva Esperanza also is a community development financial institution, which means it serves a lower income community or neighborhood.

“We’re still state chartered, so we still have regulations we have to file. And we have the auditors coming in on a quarterly basis and that’s part of being a financial institution and there’s nothing wrong with that,” she said.

“But we are the first Latino credit union. So being the first, I tell them, ‘You can’t compare me. Don’t compare me with another credit union because as the first, that means there is no comparison,” Ms. Cuevas said.

Unfortunately, the comparisons do get made and in the worst possible places as far as Nueva Esperanza is concerned — state grants, awards, and loans. It could use a financial shot in the arm to help it grow but because it hasn’t grown fast enough, such funds go elsewhere.

“That means we have more challenges,” said Ms. Cuevas, who often partners with other community agencies, such as the Adelante Inc., the Sofia Quintero Art & Cultural Center, the Believe Center Inc., the Mayores Senior Center, and the Farm Labor Organizing Committee, to promote the credit union and solicit new members.

“We are out in the community a lot,” Ms. Cuevas said. “ ... In every event that we’re at or where we have our table and we promote Nueva Esperanza, I’m able to take a copier and make a copy of their identification.

“So we actually open accounts at pretty much every festival or every event that we go to. I’m a mobile credit union,” Ms. Cuevas said. “For the first year in 2010 I was literally working out of my car, and then we had a temporary office at Champion Credit Union and at Directions on Whiteford Road.

“Plus, I would go to the organizations like Sofia Quintero every first day of the month to sign up members. It was always me just trying to generate, promote the credit union even though it was really not a real place. In all fairness, I think I did pretty good for not having a building,” she said.

How Ms. Cuevas sold and still sells Nueva Esperanza was by telling the Latino community what a credit union could mean for its future.

As a model, she looks to the Latino Community Credit Union in Durham, N.C., which began in 2000 and now has 10 branches and 50,000 members. It also has a variety of educational programs because most of its members are low-income and have not used a financial institution.

“What I say to people is, ‘OK, you may not need an account, you may never need a loan from me, but somebody down the road, someone you know, a great-grandchild, a grandchild, or just someone, you can refer them and say, ‘Look, as a member of the credit union Nueva Esperanza and one of the first 500 elite members, you can go in there and talk to them and I can guarantee you they will do everything they can to help you,’” Ms. Cuevas said.

The sales pitch is effective.

Last week a member came in seeking to close her account because Nueva Esperanza’s limited hours were inconvenient. Ms. Cuevas talked her into leaving her account open, with just a $5 deposit, to help the credit union survive.

“What I tell people is your $5 isn’t going to make the world go spinning upside down. But your $5 could open the path for someone down the road to come in and say … because my mom, my dad, my grandparent, or my aunt and uncle were some of the first people to believe in the credit union, I now have an opportunity,” Ms. Cuevas said.

Baldemar Velasquez, founder and president of the Farm Labor Organizing Committee, has seen the need firsthand for a credit union that could serve the needs of Latinos, especially immigrants.

“A lot of people in the Latino community and immigrants in particular are very underserved when it comes to the banking facilities,” the Toledoan said. “In understanding those realities, it shouldn’t take a convention of bankers to open the doors somewhat in order to have lower income people have the banking services that they need.”

Mr. Velasquez said because of their mobility, immigrants are frequently forced to keep their money on their person because banks often don’t meet their needs or won’t provide savings accounts because of rules about acceptable forms of identification.

“It’s really terrible. They walk around with cash in their pockets because they don’t have any places to deposit it,” he said.

Immigrants’ needs

Nueva Esperanza is sensitive to the needs of immigrants, and accepts 10 forms of identification, including IRS Individual Taxpayer Identification Numbers and Matricula Consular photo ID cards issued by the Mexican government.

The credit union is also working on starting branch-sharing services after Jan. 1, which would allow its members to access their accounts at other credit unions nationwide, a service that could be valuable to migrant workers.

However, until it gets permission from state regulators, Nueva Esperanza remains restricted in what it can offer, and as a nonprofit, it has had difficulty obtaining a lot of basic needs, such as marketing materials, better technology, and even a nicer location.

Other area credit unions, though, have rallied to help Nueva Esperanza succeed in its mission.

Directions and Champion offered Ms. Cuevas temporary space during her start-up period. And both still freely give her advice and assistance when needed.

Directions has been providing Nueva Esperanza with data processing at a discounted rate, and other services, such as accounting and private financial reports, at no cost.

Several credit unions in the Toledo area, and across the United States, have deposited money with Nueva Esperanza to provide it with working capital.

“Sue’s got her hands full with the challenges she’s got, so any of the necessary stuff that we can help her out with, we do,” said Barry Shaner, Directions chief executive officer.

Asked why Directions would help another financial institution and potential competitor, Mr. Shaner said that “credit union people are a little different. We do a lot of things that you might think, why would you do this?

The answer, Mr. Shaner said, is “Sometimes, it’s just the right thing to do.”

Building trust

Doing the right thing is partly why Ms. Cuevas left her job as a financial adviser two years ago to head up Nueva Esperanza. Most financial institutions either do not understand or cater to the Latino culture, which can be distrustful of banks, she said.

Language is the biggest obstacle for Latinos to use a bank or a credit union. But it goes beyond that, Ms. Cuevas said.

“I lived in Mexico for two years,” she said. “Being a Latina myself, the culture is very different. We think differently, we react differently.”

“You know, in Mexico, if I borrow $1,000 and I tell you I’m going to pay you on the 15th and I pay you on the 15th, that’s considered ‘Excellent Credit.’ That’s how they used to do that. That’s the mentality of my parents’ generation. It’s a cash-only society, no credit cards,” she said.

“For some of our members, credit, well, a lot of them don’t even know what that is,” she said.

“A lot of Sue’s members don’t have any kind of experience with what we would consider a traditional banking system, or if they do have experience, it’s not a good one,” Mr. Shaner said. “So there’s not a lot of trust there,” he said.

“Plus, she’s working with a mainly cash-based community. A big part of what she’s working to do is that education thing, and it’s so important,” Mr. Shaner added.

Educating customers

With many customers lacking a basic understanding of financial institutions, Ms. Cuevas is also an educator.

It’s not atypical, she said, for her to provide a 20-minute briefing to customers, usually in Spanish, on how credit unions, loans, and other basic services work.

“A lot of these people are here temporarily and a lot of them move a lot,” Ms. Cuevas said. “When I’m through with them I want them to be ready so when they walk into a credit union they know exactly what to expect and how to open an account.”

In the beginning, many of Nueva Esperanza’s members had never even taken out a loan, using a bank just to keep their money someplace safe.

Ms. Cuevas has been trying to change that mentality, encouraging the credit union’s members to take small loans when they can in order to build a credit history.

Sounding like a parent instilling trust in an offspring, Ms. Cuevas often concludes the loan process with a little lecture to ensure clients understand their obligations.

“I say, ‘And if you don’t pay me, I’ll find you — because I know where you live and I know where you work.’ And then I smile,” she said with a laugh.

“That smile makes ’em feel a little bit comfortable. By the time they get to us for a loan, most of the time they’ve had a really good friendship relationship with me and hopefully I make them feel comfortable. But I do tell them, if you don’t pay me, I’ll definitely find you,” she said.

Only once did she nearly carry out that threat, warning a client with a phone call that their payment was close to being overdue.

But it is a credit to both her ability to explain the loan process and to Nueva Esperanza’s loan committee that in its brief tenure the credit union has had no non-performing loans.

In step with its customer base, Nueva Esperanza specializes in loans to pay for the naturalized citizenship process, which can cost between $5,000 to $7,000, and for cultural events like weddings and Quinceaneras — a traditional coming out party for girls who turn 15.

The credit union also does standard lending, such as car loans, personal loans, Christmas loans, and tuition loans.

Ms. Cuevas said that even though Nueva Esperanza’s loan portfolio is relatively small, it has made a big difference in the Latino community.

The credit union’s loans recently helped one woman buy a luncheon truck to set up her own small business. In another case, it helped a woman get windows for her home.

“If people could understand that what we’re doing — it’s not a money-making business inside an office — we’re changing lives. We’re making a difference in people’s lives,” Ms. Cuevas said. “And things that we take for granted, like a working refrigerator, or updated appliances, or having heating without having to use space heaters, those are the type of lives that we’re changing,” she added.

Contact Jon Chavez at: jchavez@theblade.com or 419-724-6128.