By: Norm Patrick, VP, Advisors Plus Consulting
As we continue to deal with the impacts of the coronavirus (COVID-19) in the U.S., credit unions are in a unique position to provide their members with much-needed relief during this time of stress. In particular, members need help addressing varying degrees of financial strain, access to funds (either on deposit or acquired through lending), and a continuous stream of information to help make informed decisions. There are many relatively simple solutions that can help your members in these difficult times, and many already exist – often your members simply need education to fully understand how they can best leverage these solutions.
When it comes to helping your members through stressful situations, the following are four areas of focus for credit unions to consider:
Helping Members Meet Their Obligations
- A skip-a-payment program is an effective way to help members stay current on their payment obligations. Given the unique circumstances of COVID-19, consider extending the payment skip beyond the traditional one-month duration – perhaps two or three months.
- Reiterate the availability of personal loans to get members through the situation. Look at lowering your minimum loan amounts and consider fair interest rate pricing.
- Consolidation loans are a great tool to reduce monthly debt payments and help members onto a path of overall debt reduction.
- To allow flexibility for members to make necessary purchases, a temporary credit line increase could be helpful.
Flexibility in Deposit Account Access and Fees
- Many credit unions employ increased debit card daily transaction and spend limits during the winter holidays. Similar temporary spend flexibility is important during these unprecedented times. In addition, many merchants have been managing cash closely and, in some cases, are decreasing the amount of cash back a cardholder may secure during a purchase transaction. To that end, credit unions may want to temporarily increase ATM cash withdrawal limits and ensure ATMs are well-stocked with cash.
- Temporary fee waivers on deposit account services would also be welcomed by your members – such as monthly fees, relaxation of overdraft fees and ATM fees, etc.
- Where permissible, consider waiving early withdrawal fees on time deposits to help members free up needed liquidity without penalty.
Education and Engagement in Digital Banking / Mobile Payments
- As credit unions face tough decisions on potential branch closures, ensuring member education and engagement with your digital banking services (online and mobile) is extremely important.
- In the spirit of member health and hygiene, deliver promotion and education of digital wallets and contactless payments.
- Now is also a great time to continue encouraging digital money movement through direct deposit and P2P solutions.
Steady Stream of Member Communications
- Keep your members informed through a dedicated page on your website, easily accessible from your home page. Include not only steps that are being taken within the credit union, but also provide steps to acquiring and leveraging many of the benefits outlined in this blog and beyond. This is not a one-time task – ensure that the information is updated frequently as the situation changes.
- Ensure that your members are informed by leveraging all of your digital channels (including email, social media, text messaging, push notifications, etc.), using these to direct them to your dedicated web page and/or any key communications.
- Provide information to keep members safe from phishing attacks and other tactics being employed by fraudsters. Many of these tactics are increasing in sophistication and appear highly credible in nature. Educate your members by pointing out what types of information may be asked for – and, more importantly, NOT asked for – by your credit union through email communication.
As we navigate these uncharted times, the credit union philosophy of “people helping people” has perhaps never been more important. By employing some of these best practices to assist your members during their biggest times of need, you can help your credit union to not only do what’s best for your members – you can build loyal members for a lifetime.
Norm Patrick is vice president of Advisors Plus, established in 2004 as the consulting arm of PSCU. With nearly 25 years in the financial services industry, Norm founded the Debit & Checking practice area in 2007 based on his experience in managing one of the largest debit card portfolios in the U.S. For more information, visit AdvisorsPlus.com.