By Ray Birch
LEOMINSTER, Mass.–If the pandemic drags on longer than expected, one credit union is not ruling out handing its staff another round of $600 “stimulus checks.”
The checks distributed by the $785-million Leominster CU in late January, too, are another sign many credit unions are making their way through the pandemic in much better shape than expected.
As CUToday.info reported in a recent series, loan losses have been well below what many CUs had set aside in reserves. Now, many experts and credit union leaders are projecting 2021 will be a good year for the balance sheet as those reserves are adjusted and added back and the economy strengthens.
As CUToday.info reported, Leominster CU has distributed more than $8,400 in cash to its employees to help them make it through the health crisis.
Leominster CU isn’t alone. Numerous credit unions have been paying front-line workers “hazard” pay since the beginning of the pandemic, while State Employees Credit Union in North Carolina recently announced it is paying its 7,200 employees a $1,000 bonus.
‘Moving in the Right Direction’
At Leominster Credit Union, CEO Barbara Mahoney told CUToday.info if the pandemic lingers longer than expected, the credit union might do it again.
“I guess we certainly would consider it,” said Mahoney. “I can't really say one way or the other right now, it just depends on how we progress with the pandemic and how quickly we come out the other side. The country is certainly moving in the right direction with deployment of the vaccines.”
Mahoney said the credit union looked very closely at its financials before making the decision to give the money to each of its 140 employees.
“Before we made the decision to do this, we made sure we were in a position in which we could afford it,” said Murphy. “We certainly didn't want to impact the credit union negatively. We did not want to do anything that would not be prudent. We looked at our monthly income, our loan losses, and a lot of other metrics. We then decided it was a sound decision.”
Keeping Spirits Up
It was also a decision driven by a desire to keep employee’s spirits up during the difficult times, and a way to address any challenges employee households could be facing that the credit union was unaware of. Murphy said Leominster has not cut any jobs, reduced pay, or cut staff hours since the pandemic struck. But the CEO added the credit union is uncertain how other members of employees’ families have been negatively affected by the health crisis.
“We don’t really have a picture of each of our employees’ households,” said Murphy. “We don’t know how affected their household has been. Other people who contribute may have been hurt with a job loss.”
Barbara Mahoney
The checks were simply the best way for the credit union to acknowledge the tough year staff have been experiencing, explained Mahoney.
“It was just the right thing to do given all the challenges and stresses our team has had to face in the past year,” said Mahoney. “It was the right thing to do given the environment we are in.”
Loeminster CU also wanted to extend the assistance to local businesses, encouraging staff to consider spending the money locally.
“Hopefully, many will spend the money within our communities or within the footprint of the communities they live in,” said Mahoney. “There are obviously businesses struggling, we hope many of our staff will pay it forward.”
The Full Benefit
The checks included additional money to cover taxes and benefits.
“We wanted to make sure each employee received a full $600 benefit,” the CEO explained. “I can tell you I've heard from an endless number of employees thanking us for the money, telling us how much they appreciate the gesture and how good they feel about the organization—that the credit union would come forward with this type of initiative. A number of employees told me they will pay the money forward and shop locally.”
Mahoney said when Leominster first considered the payment, it ran the idea past the credit union’s board of directors.
“We brought this idea to the board,” said Mahoney. “We said we wanted to move forward with this, and it was pretty hard to come up with a reason not to do it. It's such a feel-good and nice initiative during a very difficult time.”