Credit Union National Association (CUNA), World Council's direct member organization in the United States, wrote the following article about how about the COVID-19 pandemic's impact on its member credit unions.
The U.S. economy has rapidly entered a recession due to the coronavirus disease (COVID-19) pandemic, and a new white paper from CUNA contains forecasts on the overall impact on credit unions, as well as how credit unions with certain characteristics may perform.
“If the coronavirus crisis is, in fact, relatively short-lived and the economy recovers quickly—as many hope and expect—credit unions may simply need to weather the worst of the storm for several months until the economy starts to recover,” said CUNA Senior Economist Jordan van Rijn, author of the paper. “However, many credit unions—such as credit unions that serve particularly vulnerable communities—may face more challenging circumstances and difficult decisions.”
Based on CUNA’s knowledge and experience from how credit unions across the country are responding to the crisis so far, the paper offers a few strategies credit unions might want to consider:
- Regular communication, including with members, employees and the board. Members should have clear information as to the plans and direction of the credit union during the crisis. Credit union employees should have an idea as to how the credit union plans to keep them safe, any changes to benefits or compensation, and expectations for work schedules and requirements. The credit union board should be kept apprised of any major developments;
- Consider how to support members. Credit unions might—to the extent that they are able—consider creating new and unique products and services specifically designed to help members through the worst of the crisis. Credit unions may also want to consider how to check in on members and maintain efforts at financial education and counseling;
- Consider how to support employees. Credit unions are demonstrating numerous ways of going above and beyond to support their employees. Employees might also need more flexible hours to watch children that are at home, access to retirement or other savings, or additional paid time off;
- Reconsider your strategic plan. More than likely, many of your credit union’s plans for 2020 will need to be set aside or delayed. Credit union leadership may need to resist the urge to press forward with long-term goals and refocus on simply weathering the current crisis;
- Forecast different scenarios for the credit union’s financials. Although it is very difficult to predict exactly what will happen in the coming months, it is nonetheless helpful to have some idea as to the direction that different operational indicators might move. Many credit unions are beginning to consider different scenarios and it is helpful to contemplate a range of possibilities, from worst-case to best-case;
- Return to your credit union’s mission and vision statements. In times of crisis, it may be helpful for credit union leadership and its employees to remind themselves of why they do what they do. What is the “big picture” goal of the credit union? Reminding ourselves of this vision will help credit unions when adjusting plans and facing difficult decisions.