Credit union CEO cites highs and lows of serving members in recent months
Media Contact: Barbara Fornasiero; EAFocus Communications; firstname.lastname@example.org; 248.260.8466
Pontiac, Mich. — May 14, 2020 — Michigan Legacy Credit Union (MLCU)—with six physical branches in Flat Rock, Garden City, Highland, Pontiac, Warren and Wyandotte—and more than 20,000 members, took a variety of quick and early action steps in March when the COVID-19 pandemic surfaced in Michigan with the goal of minimizing banking disruptions, assisting members financially impacted by temporary and permanent job losses, and keeping their staff safe. President and CEO Carma Peters said one of their initiatives, to move more members to online banking, has had off-the-charts response.
“We sent out a strong message from the start of the pandemic that the safest way to bank was for members to use online and mobile banking and webchat, rather than coming into the branch,” Peters said. “While we were hopeful that members would comply, the shift to online banking has been dramatic, with 50,000 more online transactions in April than we had in March. That’s a 38% increase.”
The move to online banking affirms MLCU’s strategic branching system decision, made in 2019, to update branches with a smaller footprint, including some in new locations, the introduction of a new design theme, and the adoption of Pop I/O video teller platforms. The new prototype branch is still on target to debut at the current Wyandotte branch site in the fall, with Michigan construction having resumed on May 7.
“We are already seeing the value that will come with having 35,000 less square feet of space, collectively, among our branches,” Peters said. ‘The massive shift to online banking also reinforces our belief that members will be very comfortable with the video teller concept, especially given we will still have staff onsite to provide additional assistance.”
The impact of the pandemic has been particularly difficult for Michigan Legacy Credit Union members. As a designated low-income credit union, MLCU serves members who are overwhelmingly employed in lower paying sectors that have been hardest hit: transportation, retail, travel and food service, and manufacturing, to name a few.
“Many members have been caught in the eye of the storm. We know that COVID-19 has personally impacted the health of members or their families, and now we are seeing the financial impact, with mounting job losses and an unknown percentage of temporary furloughs potentially turning into permanent layoffs,” Peters said.
In a financial paradox, one of the challenges in assessing the actual damage to the credit union’s bottom line is the availability of member loan assistance programs for mortgages, credit cards, student loans and car payments, either through the credit union itself or state and national programs.
“Members continue to be counseled not to take on any temporary loan deferments if they have the cash now to stay current on their bills,” Peters said. “That’s just kicking the can down the road, and makes it much more difficult to recover financially and from a credit score perspective. We are also finding that members aren’t tapping lines of credit because of the money currently being paid to individuals from the government. For so many reasons, it will likely be several months before we see the actual scope of charge-offs and delinquencies by members.”
MLCU has been able to retain all of its staff members during the pandemic, with about 55% working remotely. It even hired two additional workers who were trained remotely but will need to work in the branch for 90 days before allowed remote security clearance to account information.
“We’ve retained our staff and deployed them in new areas as necessary. For example, as auto loans dried up, we shifted those employees to backlogged work in other areas, including file and document scanning or purging,” Peters said. “The value of teamwork has never been more closely felt by our organization than it has been in the last few months.”
About Michigan Legacy Credit Union
Michigan Legacy Credit Union (MLCU) is a member-owned, not-for-profit financial cooperative serving members who live, work, worship, attend school, or own a business in the state of Michigan. Michigan Legacy Credit Union is committed to providing quality financial services at a competitive price, delivered professionally and efficiently while keeping member/owners and their needs first. For additional information on MLCU, visit: www.michiganlegacycu.org.
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