MADISON, Wis.–The Filene Research Institute said it is working to provide assistance to credit unions to “support their people and build their business resiliency during the COVID-19 crisis.”
Filene said each week it is providing resources based on feedback on what credit unions have told the organization they need most.
Most recently, Filene hosted a webinar examining the current state of small-dollar lending opportunities and credit union liquidity in the marketplace. It also partnered with Mike Higgins of Mike Higgins & Associates, to provide a list of six things credit unions can do now to “set their members and their organizations on a path of financial well-being.”
Six Things to Do
The six things credit unions can do to go down that path, according to Higgins, include:
- Net Worth. Higgins outlined the decision-making process a credit union will want to go through in establishing its net worth and understanding any changes it might want to make during the coronavirus pandemic.
- Skip-a-Pay and Deferments. “Because there may be a large number of members wishing to utilize programs like this, you need to be aware of the implications upon liquidity. Members are not making principal payments, so you don’t have cash coming back into the credit union. If members are making cash withdrawals, or are no longer drawing a paycheck, then you are getting hit on both sides. Be sure to model this out, or ask for help from your ALM service provider.”
- Fee, Overdraft/NSFs, Late Payment & Other Waivers. “This is another way to reduce burden upon members, and for many who need cash-flow assistance now, getting money into their pockets in the short-term (allowing them to cash checks or withdraw from savings accounts inexpensively or for free) can make a difference,” wrote Higgins. “At the same time, understand that non-interest income is a vital part of your income statement.”
- Emergency Loans. “Here’s something you can do right now to put cash in the hands of your members. Understand, you do not have an unlimited amount of resources, so prioritization is going to be important,” wrote Higgins, before outlining the criteria to be used in arriving at those priorities.
- Mortgage Loan Re-Amortizations. “This is not a “cash out” refinance. Instead, you are simply pushing out the maturity date of a loan to lower the monthly payment,” Higgins said, before providing specific examples.
- Appoint a Historian. “Credit unions have long put their members’ financial well-being first. But they don’t always tell their story as well as they could,” said Higgins. “As a final step, I recommend appointing a “historian” for your pandemic response, someone to document the decision points, actions taken, results, and more.”
Higgins’ full blog can be found here.
Upcoming Webinar
Filene will also be hosting a webinar on April I titled “Maximize Your Support to Address Members’ Needs Now: Part 2.” For info, go here.