The Rite Loan

S+AA’s

The Rite Loan A loan created with the next generation in mind.

Are credit unions neglecting an important target market? Can credit unions afford to keep ignoring the booming teen market and the trends?

2

Quinceañera A rite of passage for fifteen-year-old Latina girls. It is a community and family celebration full of tradition and meaning when a young girl is symbolically escorted into womanhood by her family and the event is witnessed by her community.

3

Sweet 16 They are the more modern version of the debutante ball.

4

Debutant Ball/Debut: The event traditionally referred to as The Debutante’s Ball, is for a young lady from an aristocratic or upper class family who has reached the age of maturity, and as a new adult, is introduced to society at a formal presentation known as her “debut” or “coming out.”

5

6

Lauren Macareg’s Debut

7

8

Invitations Gown Cake

Location

Band/DJ

Food

Pictures Decorations/Flowers

9

Source: Money Magazine, September 1, 2006 Issue

10

$35,885.02

11

What can credit unions do for these families who are about to spend thousands of dollars they don’t have? How can credit unions get a piece of the pie?

12

Quinceañera Loan •Given loan amount of $20,000 •An interest rate of 1.500% •A term of 5 years •Monthly payments will be $346.20 •Interest = $771.87

13

Debutant Loan •Given loan amount of $22,000 •An interest rate of 1.800% •A term of 5 years •Monthly payments will be $383.69 •Interest = $1,021.33

14

WHY? • More than 400,000 American Latinas turning 15 each year* • With average costs constantly rising, the impact that CUs could have on the financial, in addition to the cultural importance, should not be underestimated *Once Upon a Quinceañera: Coming of Age in the USA, by Julia Alvarez

15

WHY? • With price tags of $10,000 to $80,000 these “coming of age” parties now rival weddings in costs and, in some respects, outpace them.* • A majority of these parties are funded by high-interest credit cards - CUs can give them a better alternative

*New York Times, May, 2006

16

WHY? • • • •

Loyalty to credit unions at a young age Loyalty from family members Free word of mouth marketing Be the first credit union to focus on this group and this need

17

Why?

The Quintero Family

18

How? • Offer like every other personal loan, but emphasize the purpose and incredible rate • Use your member data to target parents, grandparents and students • Regularly advertise online, with email blasts, and both youth and regular newsletters

19

What else? • Automatically open a free savings account for celebrant and make a deposit • Give existing teen member a deposit • Verifies age and use of loan

20

What else? • Offer a chance at free services (contests, quarterly promotions, etc…) • Work with reputable vendors and refer members for packages with discounts • Use teen members for testimonials

21

Last thoughts… • Families all want to mark certain milestones in a way that lets children know they’re proud of accomplishments but • These coming of age celebrations have grown-up price tags.

22

Thank you.

23