Empowering the Credit Union Industry in the Time of COVID

Leaders become great not because of their power but, because of their ability to empower others. —John Maxwell

Filene Research Institute, like the credit unions we serve, was founded in cooperation. State credit union leagues, CUNA Mutual Group with support from CUNA and several credit unions, founded Filene 31 years ago. Filene’s work continues today in partnership with these institutions. As we consider leadership, particularly in times of turmoil, we wanted to share how two league CEOs see their roles and how they are leading in this time of uncertainty.

Filene sat down with two amazing women, Tracie Kenyon,

president/CEO of Montana Credit Union League, and Caroline Willard, the Cornerstone Credit Union League’s president/CEO, to talk about leagues and what they are doing to support credit unions right now.

What perspectives have changed or what have you realized as a result of current circumstances?

Willard: I worked in credit unions from 2001-2006, and in 2004, I actually built a pandemic plan for my credit union in response to the bird flu. The plan was really focused on how to provide services (in a time when cell phones weren’t common) and how to ensure our functional responsibilities could continue remotely. What I realize now, is that in the plan, I had not anticipated or considered the emotional impact. COVID-19 is a threat to life and safety, and that’s scary. Credit unions are on the frontlines and as leaders we are really grappling with how to keep team members and credit union members safe, while still delivering critical services. There is an emotional toll that is very real and it weighs heavily on everyone.

Kenyon: I agree, it is very personal. Almost everyone has someone they know that has been ill or has died as a result of COVID-19. It has impacted us profoundly as people, in a way that I don’t know if any of us could have anticipated. Even though as first responders we try to minimize the heaviness, there is a constant weight and pressure as we grapple with ongoing concerns for safety, for our team members, our league members and families.

How is your league addressing these challenges?

Kenyon: One of the first things we did is bring in experts and voices from across the industry. For example, we brought in an attorney to help credit unions understand the health laws and resources related to COVID-19, including providing answers to questions about the Family Medical Leave Act. We offered these experts and insights at no cost, and we stopped charging for education so that all credit unions could have access. We also brought in regulatory perspectives, economists, state government leaders and experts from the Center of Infectious Diseases to help provide credit union CEOs with facts, as details were emerging, so they could make informed decisions. From a regulatory perspective, credit unions want to know how they will be judged, and they are having to make tough calls quickly, many times with limited information.

Willard: Like Tracie, we are bringing thought leadership to our members. We are also spending a lot of time problem solving with our credit union members. My team is focused on helping credit unions swat down hurdle after hurdle on nitty-gritty operational issues – challenges like regulators not accepting drive-by appraisals or mobile notary, or how you have public auctions when there is no convening. We continue to focus on advocacy issues by working with regulators to get clarification and/or modifications made so we can keep operations moving forward. The goal is to just be really nimble and to help credit unions remove roadblocks.

Kenyon: I feel like things are changing so fast and it also feels like Groundhog Day. Every day we are putting out fires, and it is difficult, eight months in, to see progress. Being strategic is tough when so much time is spent managing the challenges of the day. Although we are a smaller league, one of the things we offer is a vibrant community. People are still looking for opportunities to engage and interact, and we give them a place to learn from each other. I’ve had to get out of my comfort zone, learning about topics like health care, by just wading in doing what we do best. [We’ve been] convening, bringing resources and curating information – on a recent CEO call, one of our members thanked me. He said, “I need to thank you for everything you have done. I was asked how I could talk so knowledgably, where I had gotten my information, and I said from my association.”

Willard: One of the other things we have done is fund the training and certification of 300 financial counselors in the region. These counselors will be available to help credit unions support their members with resources and support. We know that consumers need help and we want to make sure that we can support them during this difficult time.

From your perspective, what are the top concerns/challenges you are hearing from your credit union members?

Willard: The biggest question we are getting is, “How do you determine credit worthiness when unemployment is unknown and certain industries may not be coming back?” I have two large airline credit unions in my field of membership that had major reductions in force – we don’t know what is going to happen, or how long it will take for the market to bounce back.

Kenyon: I’m hearing the same thing. I’m also hearing a lot of concerns about regulatory exams. Decisions made in “the heat of the moment” may not be supported in retrospect. Agencies are offering reassurance that this will be taken into consideration, but credit unions still have concerns about how this will actually be handled after time has passed. Members still remain a priority and credit unions are grappling with how to apply standards fairly in such a rapidly changing environment.

Willard: I’m seeing challenges from how quickly the environment is changing as well. Just recently, I had a conversation with a CEO who lost his job, because the metrics the board evaluate him on, ROA and loan loss numbers, have understandably declined. The board members are risk averse and didn’t understand how the results were related to the current environment, and fired the CEO as a result. This is another area where we can provide context to board members – to bring them along on the journey.

Note: I wish I could have recorded the next part of this interview. The passion both women have for credit unions and the members they serve is so clear. And more importantly, the empathy that guides their leadership is evident. I’m capturing their responses together, because this was a synergistic part of the conversation, with them completing each other’s sentences and sharing back and forth.

What do you want credit unions to know or do?

Kenyon and Willard:

1. This is why we have a rainy-day fund and build capital. It’s pouring. Use it – it is OK to use some of your reserves during this time.
2. I wish we had a crystal ball and could look in the future and promise it will all be OK. We don’t know. But we can keep members first and remember your purpose.
3. Acknowledge it’s hard. We are financial first responders, and the fatigue is overwhelming. No one should feel bad if they are tired. It is hard. Be good to yourself.
4. We are built from this and for this.
5. And lastly, we wish we could give everyone a hug. We need it and we miss it so much.

I am humbled and honored to work in an industry that is built to lift people up and appreciated the opportunity to see it up close and personal. Filene is dedicated to thinking forward and changing lives, and our ability to do that is supported by the leagues across the country.

Christie Kimbell Chief Experience Officer Filene Research Institute Madison, Wis.