Look to Great Recession for COVID-19 guidance
Apply lessons from the economic downturn to coronavirus response.
As credit unions continue to meet member needs during the coronavirus (COVID-19) pandemic, the experience of the Great Recession could offer insight into dealing with the current crisis.
In an interview for the CUNA News Podcast, Mike Schenk, CUNA chief economist/deputy chief advocacy officer, highlights several lessons credit unions learned from the economic downturn that apply to coronavirus response efforts:
- Let capital do its work. Focus on serving members instead of building capital. “What that might mean is, rather than trying to keep earnings levels up, you allow the capital position to take a little bit of a hit,” he says. “You allow earnings to come down a little bit to keep serving people, and maybe even rising to a new level of service.”
Schenk adds that this approach paid huge dividends for credit unions after the Great Recession, and members would like to see similar behavior during the pandemic.
- Be a voice of reason. In the wake of the Great Recession, credit unions were widely viewed as trusted partners. That opportunity exists again. “We’re in a position to take a leadership role from a communications and messaging standpoint,” Schenk says.
Help members sort through noise in the media and on social networking sites to determine how to protect themselves. Stay in frequent contact. “Communicating a lot is a good thing in an environment characterized by uncertainty and volatility,” he says.
- Manage expectations. As lockdown and shelter-in-place orders go into effect, many credit unions have closed their lobbies and implemented remote work arrangements for employees. To curtail member frustration, reiterate the rationale behind these decisions, citing requirements from local and state governments and guidelines from the Centers for Disease Control.
As with the Great Recession, it’s crucial to connect these changes with their intended results. “When all is said and done, they're being instituted to not only protect employees but to protect members,” Schenk says.
Above all, he says, be flexible. “Adopt different behaviors and adapt to change as more information becomes available.”