Mask on Ben Franklin

COVID-19 & Financial Well-being: What Credit Unions Can Do

 

I’m neither funny nor snide when I say COVID-19 is currently the most popular acronym. The world is on edge as maps show ever-increasing blossoms of red, news reports singularly focus on COVID-19 and normal life is being “cancelled or postponed” in order to contain COVID-19’s spread.

There are many impacts to this situation but the one I will focus on here is people’s financial well-being.

As the virus spreads and localities take actions like closing schools and large public events, the strain on family finances will grow. This MSN article notes: “In a Seattle suburb, the North Shore School District sent parents a letter notifying them schools would be closed for a minimum of 14 days and schools would begin conducting remote learning on Monday. ‘I don’t know how I’m going to do this guys!’ one local mother posted on another mom’s Facebook post after learning schools for her three children would be closed. ‘I’m a single mom and work all day. I’m not quite sure I’m going to get my boys to do online learning while I’m gone.’”

Moreover, the work-from-home mantra doesn’t acknowledge that many workers simply don’t have that option. “As the U.S. continues to manage the spread of COVID-19 (Coronavirus), many workers are being encouraged to work from home or take sick days. But for some without access to remote work or paid leave, doing so may present a real financial challenge,” notes Fiona Greig, Director of Consumer Research at the JPMC Institute. “Labor earnings are the largest source of income for most working-age families—and survey data show that irregular work schedules are the most common reason for income volatility reported by employed households.”

As our credit union movement addresses COVID-19, I urge us all to consider what we can do to help people weather this challenge. Here are some ideas:

First of all, the basics. Share the public information from the CDC on the steps people can take to prevent illness as well as the resources on what to do if The CDC offers communications resources and factsheets that you can print out and hang in the lobby of your offices, outside your branches, next to ATMs, drive-thru tellers and post it on your website. You may want to consider sending a notice to your members. If people want more information, you may also direct them to your local health department. And, not to overstate the obvious, but follow the steps the CDC suggests to prevent illness – at home, at work and in your community.

Second, with respect to financial well-being, start with your employees. They too are feeling the economic ripple effects of COVID-19. Commit to not firing people who have to self-quarantine or care for a loved one; don’t make employees who are placed under quarantine exhaust all their sick and/or vacation leave time; ensure employees have access to financial assistance to help them meet financial obligations resulting from the effects of COVID-19; and work with your health insurance carrier to ensure all employees can affordably access preventive care and treatment in response to the virus.

Third, similar to the government shutdown of 2018-19, credit unions should consider helping members with financial arrangements that ease the blow of this potential dip in income. Skip-a-pay programs, lowered payments for a defined time, financial counseling and 0% short term loans can all be powerful tools to just help people get by.

Lastly, credit unions are an important part the community. Leverage your network with local officials, health departments and social services agency to see how your credit union can be part of a coordinated approach to locally addressing COVID-19. This is everyone’s issue and we all need to stand ready to do our part to get through this together.

Image credit: iStock.com/rusak