ARLINGTON, Va.—Credit union leaders’ outlook on what the future holds has fallen out of the “optimistic” range for the first time in the history of NAFCU’s Credit Union Sentiment Index (CUSI), the trade association reported.
The CUSI a monthly index based on NAFCU member responses to eight questions.
The latest survey is indicative of credit union executives’ anxieties related to the uncertainty surrounding the coronavirus, NAFCU stated. In three of the four components in the index – growth, earnings, and lending – respondents' outlooks fell considerably. However, on regulatory burden, credit unions showed positive outlooks on both recent and anticipated regulatory relief, NAFCU noted.
“In a matter of weeks, the U.S. economy has come to a skidding stop,” said NAFCU Chief Economist and VP-Research Curt Long. “Unemployment claims have reached previously unimaginable levels due to rampant business closures [and] Congress, the Federal Reserve, and regulators have moved at varying speeds to cauterize the damage.”
‘Slow and Tepid’
NAFCU has additionally forecast, “Although sub-zero growth will not last long, the recovery is likely to be slow and tepid.”
In terms of the coronavirus' impact on the industry, respondents' answers "paint an encouraging picture of the support credit unions continue to provide as the country waits for a return to normalcy,” Long said.
“In March, every respondent reported that they had offered payment accommodations, such as allowing borrowers to defer or skip payments," Long continued. "Credit unions also provided insights into actions taken and operational changes made during this time to maintain business continuity. On this topic, 89% of respondents reported adopting social distancing procedures, such as expanded telework policies, restrictions on nonessential travel, and enhanced cleaning in all locations.
Reductions in Staffing
“In addition, while 38% of respondents reported temporarily closing certain branch locations, a majority of responses reflected a reduction of onsite staffing,” Long continued. “Members were also asked about their outlook for the labor market, which reveal credit unions believe the unemployment level will far surpass records during the Great Recession.”