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In spite of the coronavirus, now is the best time to be a credit union

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Headlines in recent weeks have been dire. People are worried about their jobs, their houses and the economy. But I genuinely believe credit unions can be stable and compassionate leaders in helping their members and their communities right now.

James Schenck, CEO of PenFed Credit Union
James Schenck, CEO of PenFed Credit Union

There’s no better time to work at a credit union, because our industry is uniquely equipped to handle times of financial crisis. The number of Americans using credit unions actually grew during and after the 2008 recession, and we anticipate many Americans are already turning to credit unions during the current crisis should they find big banks are unwilling or unable to meet their needs.

At PenFed, our mortgage division is setting new records by locking in our highest mortgage volumes each day and each month. Our consumer loan business will finance tens of millions of dollars in car loans in April and finance tens of millions of dollars in refinanced student loans and new personal loans. We’ve also hired over 150 new employees during the past 45 days.

It’s not just larger credit unions that are seeing positive changes; financial experts are advising Americans to turn to their local credit unions, who are more likely to have low interest rates and friendlier service than big banks. Advisors are also commending small credit unions for “stepping up” for small businesses.

Here are three ways credit unions can continue to thrive during and after COVID-19:

1. Get the word out.
Many Americans don’t understand that banks are owned by stockholders, while credit unions are owned by their members, and that all profits get reinvested into the credit union, generating better rates and benefits for members. This difference matters a lot to Americans during tough economic times.

When you engage potential members, focus on these key differences and values. Consumers are looking for the community trust and loyalty that banks can’t always provide.

2. Be more compassionate than ever.
In internal communications, remind employees to lead with a “people helping people” mindset. Stressed and fearful Americans are responding to those who see them as real people with their own stories, rather than numbers or problems to solve.

Because of their smaller size and member ownership, credit unions can provide this personal touch far more ably than other financial institutions. Financial services should not just be secure and accessible, but meaningful. As I’ve shared elsewhere, our goal has been for our members to actually enjoy interacting with us as an institution – not just see it as a painful necessity.

Our members know that on the other side of the phone or screen, there’s another human being ready to listen and to help.

3. Learn from the past.
At PenFed, we’ve realized that our experiences of the past prepared us for the current crisis. Many of our members serve in the armed forces and are making transactions from all over the world; because of this, 95% of our transactions were already outside our branches. We invested in our mobile app, and in 2017 we established our Availability Command Center — a state-of-the-art space where we can monitor all transactions from beginning to end and screen them for member satisfaction. The center also harnesses information from government and industry intelligence centers to assess threats and uses best-in-class cybersecurity architecture to protect member data.

This command center has enabled us to respond to major disruptions. Less than 48 hours after Hurricane Maria hit the power grids of Puerto Rico, for example, our branch on the island was up and running. Now, it has been invaluable in helping our members during the global pandemic.

We also strengthened our remote work capabilities, so that 95% of our employees can work from home without any disruption in service. Having watched Avian flu, SARS and Ebola spread across various regions of the globe, we included similar scenarios in our business continuity plans. That work enabled us to transition almost seamlessly as states began to issue shelter-in-place orders, and our call volume increased. Our branch employees are now taking about 1,400 calls each day in addition to more than 10,000 daily calls handled by our call center employees who have been working from home.

Now is the time to use what you’ve learned to build agile systems for the future. Invest in digital services and mobile platforms if you haven’t already. Rewrite your business continuity plans. Train employees to handle different types of interactions, from in-person to phone to online chat or video platforms.

There’s no denying that these are uncertain and frightening times for everyone – even for those who find themselves in leadership positions. But we have to remember that even with record unemployment, over 130 million Americans are still receiving their normal work paychecks, buying cars, houses and ordering items online. Our economy will recover, and credit unions can play a key role.

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