Latino-focused credit union would help restore dignity to community, lawyer says
Two local business leaders want to plant seeds for commercial markets among the city’s many Latino entrepreneurs — job creators who are just beginning to realize their ethnic clout.
Their simple plan, to help financially empower the roughly 20 percent of the local population known as Hispanic or Latino, adds value to that community by helping restore its dignity and self-confidence, a local attorney said.
Many want in on the ground floor of this innovative business structure, which frees bank-like institutions called credit unions to loan money in ways standard commercial banks cannot.
A quick survey of local telephone directories shows there are at least seven credit unions operating in Grand Junction. If successful, the Latino credit union envisioned for Grand Junction — tentatively dubbed “Caminemos” — would boost the Latin side of the economy and, by extension, float a commercial tide that raises all boats, said Rich Lopez, co-founder and former president of the Western Colorado Latino Chamber of Commerce.
Fit and determined, Lopez was all business last week as he explained his plans for a Latino think tank and the small but potentially influential lending institution he wants to build in Grand Junction.
Lopez’ cancer diagnosis pronounced last year was not evident. He said he felt blessed to be up and moving with purpose after monthslong treatments and an extended absence from the business scene.
The retired owner of a Front Range printing business, Lopez knows he could ruffle feathers with his new ideas about financially empowering local Hispanics.
Lopez’ strategy follows a path blazed by John Herrera, founder of the Latino Community Credit Union in North Carolina.
Hererra built an 11-branch institution that provides true opportunity for 55,000 members, according to Grand Junction lawyer Dan Robinson.
President Barack Obama honored Herrera in 2013 based on his success in promoting small business growth in the Latino community.
“That is the model we want to follow,” Robinson said. “This is about restoring dignity to the community.”
CREDIT UNION ADVANTAGES
A Latino-focused credit union would allow freer lending practices for its members, a membership that in large part would consist of small Latino businesses, Lopez predicted. As the Federal Deposit Insurance Corporation does for banks, the National Credit Union Share Insurance Fund insures credit union savings of at least $250,000 per account, with separate coverage of up to $250,000 for certain retirement accounts.
Membership makes a big difference in the way banks and credit unions handle accounts.
Standard banks must follow business practices designed to maximize the return on investment for shareholders.
Credit unions look out for the best interests of their members, a group that consists entirely of account holders.
The success of any credit union depends on the character and fitness of management, the depth of member support, the level of start-up funding, and market conditions, according to a report by the U.S. Office of Small Credit Union Initiatives.
Start-up costs for investors before a credit union charter could be filed might be as high as $150,000, the report estimates.
Once the charter is approved, annual operating expenses for a basic service credit union could be as high as $333,392, according to the report.
Robinson estimated the venture had a 60-40 likelihood of success. Lopez gave it an 80 percent chance.
“Sure, we’re starting out as a Latino business, but we’re going to show the non-Latino businesses how to connect with the Latino community. They’re a tough group to reach. We’re a son-of-a-gun,” Lopez said with a laugh.
Reaching out works, he said.
“You don’t make your money on one sale,” he said. “You make your money on repeat business and that means you need to develop a trust with these customers.”
Lopez wants to help all types of small businesses relocate and expand in Grand Junction, just as the Grand Junction Economic Partnership helps large high-tech and manufacturing businesses to relocate or expand.
Grand Junction’s Latino population is evolving into its own, Lopez said. It is seeing a “new emergence of ethnic identity,” he said.