Reaching CU Normalization in a Post-COVID-19 World

A credit union’s core mission is to improve the financial well-being of its members, and that includes helping them through temporary quarantine and income interruption. To accomplish that mission, credit unions must be financially secure themselves. Charting the right look-forward strategy means growing new business on the margin and making adroit moves in operating efficiencies now. Waiting for a fully post-COVID economic environment to take shape is not a viable alternative.

The financial elephant in the room is credit risk. Regulators have issued all manner of statements supporting financial accommodation to borrowers. That is a temporary state of affairs framed by the reality that many families and small businesses simply do not have the resources to endure more than a few months of income and business interruption. Credit unions therefore must confront the thorny business of estimated loan loss provisions for at least 2020 and 2021.