While the economic effects of the COVID-19 crisis will be substantial, CUNA economists expect the fallout to be concentrated in the second quarter of 2020 and short-lived—assuming social distancing and other measures slow the spread of the coronavirus, and the virus doesn’t make a significant return later in the year.
Significant changes to CUNA’s previous forecast include:
While no credit union is immune to financial disruption, those serving vulnerable populations and members employed by affected industries, plus smaller credit unions with less diversified portfolios, will be most affected by the downturn, says Mike Schenk, CUNA’s chief economist and deputy chief advocacy officer.
“Most credit unions have strong balance sheets and are very well-capitalized,” he says. “For many credit unions, the best course of action is to avoid overreacting and to let their capital do its work. If there was ever a need to allow capital ratios to fall to meet member needs and preserve the credit union, this is it.”
Visit cuna.org/economics for the complete forecast.