In the spirit of the movement’s cooperative mission, seek out creative ways to support your members as they navigate the perilous waters of the pandemic.
Sponsored by CUES Supplier member CO-OP Financial Services
Being there for everyday “moments” in members’ financial lives has never been more critical for credit unions. It’s the key to building trust, which leads to enduring relationships and growth. The pandemic crisis has impacted many vulnerable credit union members across the country. This spring, unemployment soared to a level not seen since the Great Depression and, although it has recovered somewhat, as of August 2020 the rate remains stubbornly high at 8.4%.
Meanwhile, families that have the most to lose are feeling the greatest financial pinch. Job losses are highest in low-wage industries at 13%. According to recent Census Bureau survey data, one in four households with children are unable to cover rent, and 23 million adults did not have enough food to provide for their household’s needs.
The credit union movement was built to meet the mission of “people helping people.” Here are some ways credit unions can support their members as they navigate these challenging times.
Offer Short-Term Measures to Provide Emergency Relief
When the pandemic first hit the U.S. in March, credit unions were quick to offer accommodations to members experiencing lost or reduced wages. According to a live poll taken at CO-OP Financial Services’ THINK 20 Virtual event in May, 41.9% of credit unions that responded implemented payment relief solutions to help their members through the crisis.
These measures included a variety of solutions from fee waivers to skip-a-pay programs. Some credit unions also offered reduced interest rates and special low-interest personal loans designed to provide a cash infusion to help members through the worst of times.
Help Members Stabilize and Recover Through Financial Wellness
Just as necessary as these measures of relief is helping members understand how to achieve financial wellness over the long term. Begin by making financial wellness a core of your credit union’s culture and ensuring your employees have access to the same resources as your members. If employees are invested in their own financial wellness, they will naturally exude authentic energy and excitement around living a financially healthy lifestyle.
Successful financial wellness programs also emphasize habits that result in wealth creation over time, rather than daily money management and budgeting tactics. Credit unions that embrace a collaborative, advisory approach rather than trying to restrict a member’s behavior are in a much better position to encourage positive changes.
Payments Are the Gateway to Financial Health
Remember that payments are a lifeline for your members during the economic downturn. Whereas a number of big banks slashed their cardholders’ credit lines early in the crisis, many credit unions are doing just the opposite. Consider extending or increasing your members’ access to credit on a case-by-case basis and offer low-rate balance transfers to provide payment relief. You may even consider allowing your members to exchange earned travel miles for cash, providing some extra funds during a time when non-essential travel has all but disappeared.
Credit unions have a well-deserved reputation for stepping up in times of crisis. In the spirit of the movement’s cooperative mission, seek out creative ways to support your members as they navigate these perilous waters.
Deb Wieczorek is VP/strategic advisory & portfolio growth at CUES Supplier member CO-OP Financial Services, a payments and financial technology company serving credit unions.