Credit Union Executives Respond to COVID Challenges

As everyone hopes for the best as businesses gradually reopen under the clouds of COVID-19, credit union executives who participated in a recent CU Times webinar said they are remaining cautiously optimistic about adapting to a new normal.

Participating in the webinar moderated by CU Times Editor-in-Chief Michael Ogden were David Marovich, president/CEO of the $550 million 121 Financial Credit Union in Jacksonville, Fla., and Robin Marohn, vice president of marketing and business development at the $324 million Heartland Credit Union in Madison, Wis.

Both Wisconsin and Florida have drawn national and industry attention amid the coronavirus crisis.

Wisconsin captured national headlines when the state’s Supreme Court overturned Wisconsin Governor Tony Evers’ “safer at home” order on May 13.

“That threw a monkey wrench into everything,” Marohn said. “You have these little pockets around the state of Wisconsin, but they’re still implementing the safe-at-home guidelines while the rest of the state is in the wild, wild, west mode. Bars are opening. Restaurants are opening. Everybody was just sitting back with their mouth agape, wondering what the hell is going on here.”

The primary concern over the court’s decision to overturn the governor’s safer at home order was that it would lead to new spikes of coronavirus cases and deaths. On May 27, two weeks after the Supreme Court’s decision, the state saw its highest single-day increase in confirmed COVID-19 cases and deaths, according to a report in the New York Times.

Dr. Nasia Safdar, medical director for infection prevention at the University of Wisconsin Hospital in Madison, told the newspaper: “It worries us. We wonder if this is a trend in an unfavorable direction.”

Heartland decided to keep its lobbies closed and continue serving members via drive-thru stations until the safety of employees and members could be assured.

Marohn noted that one of the positive things to come out of the crisis is that it is forcing credit unions to learn that there are alternatives to the old ways of conducting business.

“Our member-owners are realizing that there are different ways of doing business,” he said. “It actually can be a lot more practical from their perspective, so I’m hoping that we and other credit unions can take advantage of that as we slowly come out of this, and I think we will.”

In Florida, credit union branches in Jacksonville were among some of the first in the nation to open their lobbies.

On May 13, for example, the $430 million Jax Federal Credit Union announced it reopened branch lobbies to members under current health and safety guidelines set by state and federal authorities. Staff members are required to wear face masks and/or provide service from behind clear acrylic barriers, branches have posted guidelines for maximum occupancy that reflect social distancing guidelines, and members are encouraged to wear a mask and may be asked to check in, then wait in their vehicles during peak service times.

Marovich said 121 Financial decided to take a more phased approach for reopening branches. On May 26, the credit union announced it was reopening branch lobbies but only for limited services and by appointment only.

“We’re not going to open the lobbies yet to full traffic until we really see what’s going on,” Marovich said. “I really think that’s how we’re going to do it until we feel good and safe [that] what we have in place does work.”

While working from home, one of the challenges has been how to engage in business development virtually.

“I think that’s been a major challenge, at least for me, because I’m one of those who is out in the field a lot doing a lot of face-to-face,” Marovich said. “We’ve been working with our current member-owners and not doing much new business outreach because we really haven’t had the bandwidth.”

Because there has been so much focus on issues surrounding coronavirus and serving the immediate needs of members, Marohn also has not been able to launch many new business development initiatives.

“I think we’re starting to get around to that in trying to figure out what that is going to look like,” he said.

As far as attracting new members during the pandemic, Marovich shared an idea that may help 121 Financial and other credit unions tap into new pools of prospective members.

“One of the things that I think we want to focus on as we begin to open up is that we did, to date, 444 of the Payment Protection Program loans,” he said. “In my mind, that is where we need to start, by going back to those business that we helped and asking them to allow us to work with their employees. I think there’s a great opportunity there.”

Nevertheless, Marovich and Marohn have seen their membership numbers increase during the coronavirus crisis, in part, because consumers have heard how credit unions have stepped up to help their members.

“New member activity is actually going up. I’m not exactly sure why that is,” Marohn said. “I’d like to say it’s based on the work that we’re doing on social media and with advertising and promotion. I think that’s part of it, but I also think that at least in Wisconsin, and in particularly, again, in Madison, there’s a big awareness of the difference between credit unions and other financial institutions. I think not only us, but other credit unions are probably in the same boat and that they’re seeing some new member activity that they hadn’t thought they’d see at this point.”

To keep members and employees safe at branches and as other offices gradually reopen, credit unions are in need of sanitation supplies that have been hard to find.

“We’ve had issues surrounding this, and I would say it gives us trouble in trying to get the right supplies and everything that you need,” Marovich said. “But we’ve been lucky. We’ve had a few people that had some connections from vendors, [and] we were able to get some of the supplies we needed.”

Some state governments and local Chambers of Commerce throughout the country have listed personal protective gear suppliers. Delaware, for example, has a dedicated site featuring vendors that sell masks, gloves and cleaning supplies, although the vendors listed have not been vetted by that state government.

“We have been already stockpiling those things for the second time around,” Marohn said. “I think that’s not only something we as credit unions should be doing and other business should be doing, but probably we should be doing it on a household level, too, because coronavirus is going to come back. How badly and to what extent is up for debate, but I don’t think anybody debates that it’s not going to come back.”

If there is a second wave of coronavirus that forces another stay-at-home order, Marohn and Marovich said they are confident they will be respond to it much more quickly because of what they learned when the first stay-at-home orders were issued earlier this year.

In the meantime, Marohn and Marovich encouraged credit union leaders to practice patience and continue to collaborate.

“We tell our members to be patient. We tell our associates to be patient. I know our CEO Sally Dischler has told the rest of the executive team more than once to exhibit some patience with everybody,” Marohn explained. “I don’t think there has been a time when it’s been more important than right now to listen to what our peers are talking about and saying.”

Marovich noted he participates in a weekly conference call with other CEOs in his area.

“It has been very helpful. I think it’s been good for all of us,” he said. “And quite frankly, I think it’s strengthened our relationships with one another as well.”