6 ways the coronavirus has changed credit unions

One of the earliest indicators of how widespread the pandemic’s impact would be was on the credit union conference circuit.

Many industry groups initially began by postponing conferences, delaying scheduled events by anywhere from three to six months. But as the pandemic worsened, many groups — including vendors, state and federal trade groups — have shifted their events to a virtual format. As of late June only one major conference left for the year — the National Association of Federally-Insured Credit Unions’ Congressional Caucus in Washington — is still scheduled as an in-person event.

But other Washington-based activities have already been curtailed and it remains unclear what impact that might have on the industry's broader advocacy priorities. Conference cancelations and shifts to online formats — which generally include a significantly reduced registration fee compared to live events — are also expected to be a major blow to many groups’ budgets.

It’s not just large trade shows. Required credit union meetings have also been retooled for the social distancing era, though there are indications that may turn out to be a boon. While members might not take the time to come to the credit union’s headquarters or a hotel ballroom for an annual meeting, some institutions have reported sizable increases in participation by live streaming those events.

The pandemic could change credit union hiring and staffing for years to come.

As branches began to close down or limit access in March and a majority of the industry moved to remote work, many institutions curtailed their hiring, putting most recruitment on hold and filling only the most essential positions. And those CUs that did bring on new employees often only had them inside a brick-and-mortar facility for long enough to get them set up with company laptops and online credentials before sending them back home to work.

As the outbreak came somewhat under control near the start of summer, however, credit unions in many states began reopening their doors to members, raising concerns about how to keep staff safe as branch traffic increased.

Many financial institutions and other businesses have instituted strict policies requiring the use of a mask or other face covering while on the premises as a way to protect employee. But some consumers have pushed back against those rules — along with some people who can’t wear masks for health reasons — often leaving management in a bind regarding how to enforce those policies without alienating members.

Some credit unions — including several of the nation’s largest — have also said they expect to see long-term staffing changes as a result of the pandemic. Chiefly, a number credit unions have indicated they’ll be keeping a sizable portion of their staff working from home for the foreseeable future. While that will help mitigate some health and safety concerns, it is also likely to create new challenges, including how to effectively instill organizational cultures, how best to collaborate when teams are dispersed and more.

The pandemic is likely to have an impact on credit union consolidation.

While the number of mergers slowed down somewhat in 2019, some institutions could find themselves in a tight spot if the recession brought on by the pandemic results in widespread job losses for their members. That could mean missed loan payments and declining earnings.

And while a number of credit union mergers have been announced since the pandemic began, many institutions have had to delay their votes to approve those deals or retool the voting process to reflect the need for online or mail-in voting.

Branch traffic was already on the decline before COVID-19, partly as a result of a decade spent pushing members toward self-service channels. If small credit unions — many of which operate facilities on the premises of their sponsor groups — are forced to close their doors in the wake of the new recession, that could result in a decline in the number of credit union branches. And with social distancing in effect and branch access limited in some states, credit unions have also begun rethinking their branch networks, including the possibility of shrinking their physical footprint.

For those locations that do stay open, staffing models are already changing. Limited in-branch traffic has led many credit unions to cross-train staff to serve in other roles that supplement their member-facing tasks. And with plenty of questions remaining surrounding the upcoming academic year — including how college campuses will function and whether K-12 schools will run on a normal schedule — there could be major changes coming for branches on campus and in schools.