The coronavirus wake-up call came early for BECU ($22.2B, Tukwila, WA). After all, approximately half of the known U.S. deaths from the illness it causes — COVID-19 — have occurred in a single nursing home in suburban Seattle.
Al Wilson, Director of Cybersecurity Business Resilience, BECU
The nation’s fourth-largest credit union responded quickly.
“We’ve had a pandemic plan in place for several years, but we began focusing on the coronavirus in mid-January and issuing communications to our employees beginning on Jan. 24,” says Al Wilson, BECU’s director of cybersecurity business resilience.
West Coast credit unions are currently at the epicenter of the outbreak, but that could change. The leadership of at least one big heartland credit union knows this well.
“The number of cases in Missouri and Kansas is low so far,” says Joan Cohen, chief administrative officer at CommunityAmerica Credit Union ($3.0B, Lenexa, KS). “We expect the situation to change and are prepared to act accordingly
Indeed, credit unions across the country are bracing for the impact of the unknown, perhaps menacing, future ahead as schools close, businesses send workers home, air travel shrinks, and grocery stores empty.
For the providers of critical financial services for more than one-third of all Americans, bracing includes deciding how to continue operations, including branches and ATMs, all the while pushing members as much as possible to hands-off digital services.
Credit unions don’t have to go it alone. Guidance already has been issued by the FFIEC, the interagency regulatory consortium that includes the NCUA and FDIC. And Nacha, operator of the vast ACH payments network, has done the same, including an admonition that financial institutions can’t easily blame the pandemic for not meeting their obligations to keep the cash moving.
The landing page banner on the Logix FCU intranet directs employees to continuing updates on the coronavirus crisis.
Logix FCU ($6.3B, Burbank, CA) is also in an outbreak hotspot, near one of the world’s busiest international airports, major ports, and large universities that attract students from around the world.
Daniel Tschopp, Senior Vice President of Enterprise Risk Management, Logix FCU
“We have to assume we are on the forefront of infections in the United States,” says Daniel Tschopp, Logix senior vice president for enterprise risk management.
A newly created task force is meeting daily to update the cooperative’s pandemic and general business continuity plans and multiple measures already are in place.
They include online member communications, a microsite for employees, equipping branches with disinfectants, and boosting the capacity for working at home by providing more laptops and more software licenses.
Tschopp says Logix also has held a health and hygiene clinic and has relaxed requirements for PTO and doctor’s notes. For members, three-month loan extension agreements are being offered on a case-by-case basis, Tschopp says.
In both cases, there’s a learning curve. Hardship requests are already coming in and the credit union is finding that validating them is different from more familiar situations, such as wildfires. Logix has learned another major lesson, too.
“Don’t build a BCP [business continuity plan] on aspirations,” Tschopp says. “Build it on realities.”
A Coronavirus Panel Discussion
Callahan & Associates is hosted a panel discussion for credit unions on Monday, March 16, at 2 p.m. Eastern.
Request the recording to view a panel of credit union leaders from across the country to learn how they’re handling matters such as branch services, member impact, travel, disaster recovery, and more. Plus, the line is open for attendees to ask their own questions.
Knowledge Is Power And Travel Is Risky
Tips For The Time Of Coronavirus
Joan Cohen, chief administrative officer at CommunityAmerica Credit Union in Kansas City, offers six suggestions for operating during this crisis.
Be ready to enact emergency assistance to members and employees.
Communicate with employees often enough so they know the organization is on top of the situation. Be understanding of employees who are anxious.
Explain the credit union's actions — employees need to know their safety and the ability to serve members is the top priority and why the action(s) might help.
Make sure there's enough connectivity y —VPN licenses — for people to work from home. Think through the ramifications of people working from home — compliance, password changes, supervisor assistance, etc.
Clean ATMs, branch door handles, etc., more frequently. Distribute hand sanitizer and antiseptics throughout your locations.
Stop offering refreshments in the branch.
Cohen at CommunityAmerica says her organization is relying on the federal Centers for Disease Control and the Kansas and Missouri health departments for “actionable news.”
“We’re also leveraging key partners, like our insurance providers, as well as peers and industry contacts," she adds. "Of course, we’re also monitoring other reliable sources of news and getting education wherever we can.”
One informed change the Kansas City cooperative has already implemented is about travel. Employees back from a cruise, for example, must work from home for 14 days.
“In the future, we might require this same self-isolation if employees travel to a city or country where the pandemic has gotten worse,” Cohen says. The credit union also will be asking employees if they’ve been in contact with anyone who’s been ill.
Back in Seattle, BECU already has gone a step further.
“We’ve restricted all air travel — domestic and international — for non-essential business purposes, suspended vendor visits that require air travel for business-related purposes, and halted any large group gatherings,” says Wilson, the cybersecurity business resilience director.
The Economic Impact On Vulnerable Members
Many credit unions already offer loan relief and similar help to members hit by economic downturns, even in the best of times. The need might soon become acute, especially among workers with limited or no access to health care and little or no paid time off. Millions of Americans fall into that category and many are in the hard-hit hospitality, service, and retail sectors.
Jim Hunsanger, Chief Risk Officer, Michigan State University FCU
“We’ve begun to have members call in who are being laid off or who are self-employed and their work has stopped,” says Jim Hunsanger, chief risk officer at Michigan State University FCU ($4.7B, East Lansing, MI).
The world’s largest university-sponsored credit union is responding with assistance loans, loan modifications and extensions, and skip-a-pay offerings.
Hunsanger says some members have even called to ask about the safety and soundness of the entire financial system.
“We’ve provided talking points to our employees, so they’re equipped to discuss all those concerns with members,” Hunsanger says.
The Emotional Impact And Need To Give Back
Wilson at BECU stresses the need to have mechanisms in place to hear from employees, members, vendors and other partners to identify barriers or challenges the credit union needs to address. Clear communication will help avoid adding stress to an already stressful situation, he says.
Joan Cohen, Chief Administrative Officer, CommunityAmerica Credit Union
“We do have some anxious employees,” says Cohen at CommunityAmerica. “We’ve not seen specific instances of member impact, but we anticipate that may change, and we’re prepared to respond to our employees, members, and community at large as needed to the best of our ability.”
This might truly be an unprecedented test of the credit union ethos of “people helping people.” Cooperation among cooperatives is Cooperative Principle 6, of course, and then there’s Cooperative Principle 7: Concern for the Community. That’s already happening at BECU.
“Our Social Impact team is speaking with many of our nonprofit partners to determine how we might help ensure the long-term financial health of our community,” Wilson says.
The big credit union already has committed funds to the Seattle Foundation’s COVID-19 Response Fund, which will focus on helping people who have limited access to health care, few or no sick days available, gig workers, and members of vulnerable ethnic communities.
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