By Frank J. Diekmann
Beginning around mid-2019, it became something of a readymade go-to staple for forecasters and publications to look to the year ahead and frame it as a “2020 Vision.” That one’s not coming around again, so you can’t really blame anyone for the lack of originality—and prepare yourself now for all the 2020 hindsight references.
It wasn’t just the headlines that were consistent. It was the predictions themselves. As I noted here http://www.cutoday.info/THE-tude/Turning-the-Words-You-May-Have-Kinda-Heard-Into-Action last week, whether it was an amateur prognosticator or expert futurist, CUToday.info was supposed to be reporting right now on deposits coming into CUs because of rising rates (rising rates!), not a crashing stock market, and the labor market was supposed to be tighter than ever. I’ll spend no more time on the missed predictions, except to say it really tells us something about the nature of “expert futurists,” doesn’t it?
Instead, the focus is on this radically changed world that is going to test every CU leader in ways he or she never expected. I wish I could take credit for the observation, but as was noted by one person on Twitter, “unprecedented” is suddenly being used an unprecedented number of times. It’s what people say when faced with something they’ve never seen before outside of Hollywood movies and really, those are all exaggerations anyway, right?
Can’t ‘Sugarcoat’ It
But while a pandemic of such extraordinary proportions may be new, one person believes pages from an old playbook are as relevant as ever. CUNA’s chief economist, Mike Schenk, said during a conference call with the media there is “no way to sugarcoat it,” credit unions are going to feel “huge implications” as the economy contracts by as much as 12% in the second quarter. Other economists have had even more dire predictions.
If there is some good news it’s that members and CUs themselves are better positioned financially entering what some have darkly said could be a “Depression” than they were entering the Great Recession of a decade ago.
But perhaps even more important than the financials, according to Schenk, is the lessons learned and the example set by credit unions following the busting housing market bubble.
Schenk believes credit unions would be best served if they “pause and to think back to how we responded during the Great Recession. Coming out of the Great Recession credit unions generally remained engaged and continued to serve consumers in really obvious ways when the for-profit sector hunkered down and licked its wounds and turned consumers away. The result was four-million memberships every year for four years. That’s astounding. Remaining engaged and doing what you can to help members, we believe, will once again pay dividends.”
It isn’t going to be easy, obviously. Credit unions have been quick to roll out offers of emergency loans, one-cent overdrafts, $1,000 bonuses for employees and more. Those have been life-savers for many people during job and government shutdowns, most of which didn’t last long. No one has ever before faced a country shutdown, and no doubt there are going to be credit unions themselves whose lives are going to need saving. It will be interesting (and sad) to see if COVID-19 also claims the lives of the most vulnerable CUs, as happened during the previous downturn.
A Digital Irony
Cities on lockdown. Restaurants and movie theaters closed. Office buildings empty. The Las Vegas Strip as quiet as the strips of desert not far away. The big disruption of 2020 was supposed to be digital; instead, it’s viral, and ironically it’s digital technology that is a big piece of the panacea and that is allowing credit unions to continue to serve members.
People are right; it is unprecedented. Now credit union leaders will need unprecedented imagination more than anything else in responding. I’d be interested in hearing your thoughts and ideas and what you’re doing. Drop me a note at Frank@CUToday.info.
Frank J. Diekmann is Cooperator in Chief at CUToday.info.