The U.S. changed in March 2020 as the COVID-19 pandemic raced around the world. Facing the first government-imposed lockdown, VSECU (Vermont State Employees Credit Union, $1.1B, Montpelier, VT) formed a pandemic response team on March 13.
“We updated our disaster recovery plan in 2019, so the first thing we did was go to that”, says Terry Field, VSECU’s senior vice president of finance and chair of the pandemic response committee. “I give a lot of credit to our IT staff. They have put the infrastructure in place over the years for us to quickly go to a remote workforce.”
I give a lot of credit to our IT staff. They have put the infrastructure in place over the years for us to quickly go to a remote workforce.
Prior to the pandemic, only a handful of employees worked remotely; within two days of forming the response team, VSECU moved more than 100 employees to a work-from-home arrangement. The credit union also closed branches to walk-in lobby traffic; however, it kept its drive-thrus open.
To serve members virtually during the lockdown, VSECU accelerated the rollout of interactive teller machines (ITMs). It already had ITMs located inside branch vestibules, keeping the machines secure and out of the harsh Northeast winter weather, but the credit union quickly moved to replace traditional drive-thru services with ITM video services in some branch locations.
“The pandemic catapulted many strategic initiatives forward, such as the deployment of ITMs and the accelerated adoption of digital member services”, says Yvonne Garand, VSECU’s senior vice president of marketing and business development who oversees the branch member experience and services.
Before the pandemic hit, VSECU was in the process of upgrading its data center infrastructure and digital banking program to accommodate credit card integration that allowed members to see all transactions in one place. VSECU also launched a mobile app to give commercial customers access to online services. In 2020, 83.7% of VSECU’s online users converted or enrolled in these new digital platforms.
Lifeline For Local Businesses And Main Street Members
Local businesses also faced a dire situation during the coronavirus lockdown, but VSECU stepped in to support small enterprises across the state. The credit union provided $25 million in loan originations through the government-backed Paycheck Protection Program (PPP) becoming the No. 1 PPP lender among credit unions in the state. VSECU opened up the program to any business in the state regardless of membership, and its PPP loans which averaged $34,600 supported the retention of thousands of jobs. Additionally, as a certified lender for the Small Business Administration, VSECU facilitated a variety of grants and programs that totaled $160,000 for small businesses.
VSECU has a dedicated team for business lending, but the effort to support these businesses during the lockdown extended across the entire organization.
“We had to pull in resources from other departments”, says Greg Huysman, director of business lending at VSECU. “We did all the origination with a staff of six or seven people. It was a lot of work, a lot of long hours, but we got it done.”
Local businesses are the lifeblood of a community, and VSECU worked diligently to support them, but the credit union wasn’t about to let individual members suffer in silence. The credit union stepped up to meet their needs by modifying loans of all types, not just mortgages, eliminating fees on its skip-a-payment program, and deploying the Member Emergency Loan program. Through March 2021, when the credit union closed the program, VSECU issued nearly $1 million in emergency funds with an average loan amount of approximately $2,000.
“Our members were frightened by what they were hearing in the media and what they were experiencing themselves”, says Valerie Beaudin, senior vice president of lending. “Our emergency loan was intended for members, but we were able to remove that requirement and offer the loan to any Vermonter who experienced loss wages, even if they were a self-employed Vermonter.”
Our emergency loan was intended for members, but we were able to remove that requirement and offer the loan to any Vermonter who experienced loss wages, even if they were a self-employed Vermonter.
As a result of the wider scope, new members brought in by the program accounted for 17.48% of program borrowers. To offer loans to the wider market, VSECU partnered with several nonprofit groups including the Vermont Community Foundation to create a loan loss reserve. As of Oct. 31, 2021, the emergency loan program had a delinquency rate of 4.28% and a charge-off rate of 4.30%, which VSECU lowered to 1.85% after applying the partner-funded loan loss reserve. By comparison, the delinquency and charge-off rate for all VSECU loans was 0.44% and 0.07%, respectively.
According to Field, navigating the COVID-19 pandemic and pandemic response brought to light a number of areas no one could have anticipated during disaster planning.
“When we think in terms of disaster recovery and business continuity, we think in terms of losing our system or a branch getting flooded”, says the pandemic response committee chair. “We don’t think in terms of people not being available to come to work.”
In that kind of environment, communication becomes a top priority.
When we think in terms of disaster recovery and business continuity, we think in terms of losing our system. We don’t think in terms of people not being available to come to work.
“For nearly a year, marketing and communications pivoted almost exclusively to supporting the constantly changing environment”, Field says. “Everything was designed to ensure people had access to their financial resources and accounts and to communicate that the health and wellbeing of our workforce and members was our priority.”
Field also was surprised by how quickly staff members adapted to remote working. That comfort level is now playing a role in returning to on-site work.
In the spring of 2021, as COVID-19 numbers finally started to decline, VSECU considered what policies it needed to set for bringing staff back into the office. Field says he and the team evaluated how other financial services firms as well as other sectors were handling return to work, and they decided against issuing a credit union-wide mandate.
“We pretty much left it up to the managers”, Field says.
Quantify Your Impact
Does your credit union make an impact? As part of Callahan’s impact initiative, we are asking credit unions within Callahan’s Impact Network to submit their impact data. This data is essential in measuring the impact credit unions make within their communities. Will you help us put impact into a clearer view?
If a manger can handle their staff and productivity and wants to keep their staff working remotely, then they can choose to do so. If a manager wants to bring back their team, then the credit union has a few guidelines to keep in mind. And if a manager wants to operate with a hybrid model, then they need to develop a plan for that, Field says.
Field’s own accounting department staff members, for example, continue to work remotely.
“They come into the office once a month as a group”, he says. They have a great time. They love seeing one another.
“The bottom line”, Field says, “is that there is no one-size-fits-all solution. Some employees will need to work in the office, whereas others will prefer the office over working from home.”
“It really is about transparency”, Field says. “And it’s about trusting our managers and the people who are dedicated to our credit union.”
This is part of the “Anatomy Of A Credit Union” series, presented every quarter by Callahan & Associates. Read more about VSECU or dive into a decade of archives. Contact Callahan to learn about gaining access today.