Other Side Of Weather Forecast: How It Affects Behavior
RANCHO CUCAMONGA, Calif.-The bad weather during the winter of 2010-11 has been of such proportions that it isn't just road salt and government clean-up budgets that are running short. Pundits have even begun to run out of clever nicknames for all of the storms.
CUs in nearly every part of the country have been affected by the winter storms, even in areas in which the weather is typically milder. But the effects go beyond just the obvious, such as branch closings or power outages. Bad winter weather can be felt in the moods of members and employees, personal finances, call center traffic, lending volume and more.
The recently released AP-Weather Underground Poll found four-in-10 Americans saying the weather affects their mood, with winter most likely to leave them feeling depressed. Not surprisingly, it was residents and Northeast (83%) and Midwest (76%) who most strongly feel the blahs.
The winter weather will be felt by CUs in numerous ways. In particular, low-income members can feel the strain of heating bills, while others may see jobs and hours cut, forcing more expenditures on credit cards that could turn into bad debts in the months ahead. Others, in areas where snowfall has been particularly heavy, may incur roofing damage that will require a home equity loan come spring time. Consumers in general tend to buy just essentials when weather is bad, and put off new car purchases, for instance.
Studies have shown a correlation between warmer weather and more robust consumer activity, but CUNA VP-Economics and Statistics Mike Schenk said that it may be too early to draw any parallels between economic conditions and winter weather patterns over the past few years.
"Generally speaking, bad weather is not good for business," noted CUNA economist Mike Schenk. But right now, "You also have this issue of trying to separate the effects of a pretty tepid economic recovery and a weak labor market and stock market gyrations and potential revolutions in other countries, so separating all of that out is not the easiest thing in the world. I think [the weather] is having an impact, I'm just not aware of anybody that's taken the time to measure that impact in a comprehensive way."
He added that, because more winter storms may still be coming over the course of the next two months, the effect of this winter's weather on the economy may not be evident for some time yet. The weather may keep members out of branches, but it doesn't mean they don't need to speak with their credit union.
"When it's not necessarily a pre-planned holiday and a lot of people are sitting at home, we do see an uptick in call volume," noted Mark Chatfield, chief operating officer of CO-OP Member Center. While call center employees are also affected by inclement weather, "we're still in here, answering a higher number of calls than we usually do, because of the weather. People are sitting at home, and that's one of the ways they can actually get something done." Bad weather also drives "an immediate impact on web-based banking," he added.
Day Off No Longer A Given
While all CUs have their own policies for closings and telling employees to stay home, that doesn't mean a day off for everyone. Increasingly, CUs have embraced work-from-home arrangements.
Many of those interviewed for this story predicted that continuing advances in technology may push the credit union community to adopt even greater levels of remote access for employees.
Still, Craig Beach, SVP-marketing/business development for CO-OP Shared Branching, noted that the biggest issue to working remotely is not the technology involved, but the inherent security risk-in other words, a decision that gets made on an individual basis.
The bottom line is that unless there's no way around it, most CUs are going to be open for business. "It takes quite a bit for credit unions to close, because credit unions are there for their members," said Mike Wishnow of the Pennsylvania CU Association. "If five members walk in, the credit union is going to be there, and if 500 members walk in, the credit union is going to be there."