By Ray Birch
ST. PETERSBURG, Fla.—As credit unions focus on members’ financial health during the COVID-19 crisis, are they overlooking their employees’ bottom lines?
A new study suggests many credit union employees—even at CUs that have not cut back on staff or hours–are feeling the pinch from the pandemic-driven economic downturn.
According to new research from PSCU and Members Development Company, the financial health needs of CU staff are evident: More than 60% of credit union employees are struggling financially. The study was conducted by the Financial Health Network with support from MDC and PSCU.
The report, How Credit Unions Can Become Financial Health Providers, assessed the financial health of credit union members and employees against a national benchmark.
Merry Pateuk, SVP of industry engagement at PSCU, told CUToday.info the same report shows over 60% of credit union members surveyed are struggling financially, and at least one-third live paycheck-to-paycheck.
“Credit unions’ focus on their members is very much needed, as we know,” said Pateuk. “I don’t think credit unions have overlooked their staff, and I would not say they have missed the boat here. But I do think there is an opportunity to make sure the same resources they’re bringing to bear to help members should be brought to bear for their employees. And, there are tools credit unions use to teach members financial literacy, so, maybe these should be used with staff as well.”
As CUToday.info recently reported, Leominster Credit Union in Leominster, Mass. Distributed more than $8,400 in “stimulus” checks to its staff—$600 each—to help employees make it to the other side of the health crisis.
What is happening with credit union employees who are struggling financially is money problems within the family, explained Pateuk.
“I think the employees represent America. What is happening among CU staff is just reflective of what's going on in the country now,” she said. “While credit union staff are still employed, that is not to say a spouse has not lost his or her job. Maybe they work in the restaurant or hotel industries. The loss of that income can be very stressful.”
Merry Patuek
But Pateuk does believe the finding has the potential to be an “aha moment” for credit unions.
“It means paying attention to what is happening within our own walls. There are more than 350,000 people who work for credit unions,” she noted.
Starting at Home
Pateuk shared what PSCU has been doing for its team to help them manage their household balance sheets during the health crisis.
“We began a campaign internally about a year ago that says financial wellness starts at home. And for us it meant taking a look at pay practices,” said Pateuk. “In January this year we increased our minimum wage across all of our employee base to $15 an hour. That was just a little piece of it, and there a lot of resources we’re bringing to bear for our staff to make sure they have the tools and resources to be more effective at managing their own financial health.”
Some of those tools include one-on-one financial counseling and 401(k) investment advice, Pateuk said. She advised credit unions, if they are not already doing so, to evaluate the financial health of their teams.
“Whether it’s a standalone survey or just touching base with staff, there is an opportunity now to put some extra focus on employees. Look at them like you look at your members. Are they financially healthy?” she asked.
There is an extra benefit to making sure staff are managing their finances well and are informed about how to keep their bottom lines healthy, added Pateuk.
“The healthier employees are financially, the better they will be at educating members as they walk into the credit union and ask for assistance,” she said. “They will better understand the products and services the credit union has available to help members.”
More Is Needed
Pateuk said financial education may not be enough anymore to get members or staff on the road to financial health. She emphasized that while education works, there are new tools available that can be used alongside financial literacy programs.
“We need to look at what tools and resources we need to bring to bear that will help nudge the consumer, or employee, along in their journey to financial health,” Pateuk said. “For example, we can do things like send alerts—your digital banking app can remind someone a payment is due. Maybe it is something as subtle as when you go to make your online bill payment you remind people they can pay more than just the minimum payment. We have new digital tools now that can help bring about behavioral change.”
Second Part of Study
Brenton Peck, program director at the Financial Health Network, said a second part of the study is underway looking into action steps—which might include new solutions and possibly fintech partnerships—for credit unions that would improve consumers’ financial well-being. Those solutions could include more real-time information and transparency around spending accounts.
“We are looking at new solutions to develop and are identifying market opportunities that we think will move the needle here for credit unions,” said Peck. “We’re taking eight indicators of financial health and taking the data that we found through the study and we will put forth some recommendations we think are helpful for both PSCU and Members Development Company that they can share with credit unions.”