Let me begin by saying, I don’t have the full answer to where we go from here.
I don’t know whether our economy rebounds in six months or plummets into depression. I don’t know when we go back to our lives as we knew them.
But here’s what I do know: no matter the answers to these questions credit unions will fight for their members and CUNA will support you every step of the way.
But first let’s start with the economy. Fortunately, CUNA has a fantastic economics team that is constantly monitoring and evaluating the economy and its impact on credit unions.
The first thing that stands out is our status before all of this happened. Credit unions were extremely well positioned heading into 2020. That stability is so important to how we can weather the storm now.
Another important note is that while there are a lot of trends we can study across various economic recessions, we can’t predict the future. What we’re living through now is especially challenging because unlike many financial crises of the past, the origin of this crisis isn’t rooted in the financial system.
A global health pandemic in a globalized world is something new.
But just because it’s new doesn’t mean everything is unknown. Economic and financial modeling can ground us and provide some clarity, knowing even the best predictions need to be nimble to changing conditions.
The biggest number we know for sure is that 33 million Americans filed for unemployment in the past two months due to COVID-19. As a result, we can expect a significant fall in U.S. gross domestic product and a rise in unemployment this year, particularly concentrated in the second quarter.
Credit unions have proven to be resilient time and again in our century of service to Americans. It’s not that we shouldn’t be prudent, but where there’s passion and commitment there’s a way forward.
Credit unions have suffered growth and earnings losses during past recessions, but we’ve continued to serve members through the ups and downs. Moreover, credit unions tend to be significantly more resilient than banks during recent economic downturns.
There’s something to be said about how living our mission and putting our members first during difficult times makes us more resilient than many of our competitors. I think it’s because we work for people and they work for money.
When there’s a crisis we rush to our members, we listen to their problems, and we work to find solutions. This is our first instinct.
When the reality of COVID-19 hit, CUNA immediately launched a survey to gain data and stories of how credit unions were helping their members. This was days into the crisis, but we knew credit unions would already be finding solutions for members.
We knew your first step would be to provide relief.
Millions of Americans have been thrust into financial uncertainty almost overnight. We don’t know yet when restaurants will need waitresses and airlines will need flight attendants. We hope it will be as soon as possible.
But in the meantime, we know credit unions will be there to pause that waitress’s loan repayment, extend a personal loan to that flight attendant, and support community meal services for the unemployed and their families.
JIM NUSSLE is president/CEO of CUNA.