Since credit unions are member-owned, not-for-profit institutions, many have created new pandemic-centric programs. Here are some of the post-COVID solutions CUs are offering to help their communities while generating business. We’ve also included a unique opportunity for credit unions looking to add to their offerings.
Short-Term, Low Rate Personal Loans
Credit unions have stepped up to help their members by offering 3-month and other short-term loans at or near zero percent interest. These short loans are often called pandemic relief loans.
Individuals and businesses are using them to bridge the gap caused by lost wages and reduced business. These “small dollar” loans are being compared to stimulus checks that each individual gets to control and define.
Financial Counseling
Unlike big banks, credit unions don’t take advantage of their customers’ financial ignorance. Though this isn’t a new offering, offering financial counseling is a major asset right now. No one was prepared for a pandemic or its effects, but punishing customers for their lack of knowledge creates brand distrust and hurts your bottom line and your customers’ livelihood. Credit unions have adjusted hours and protocols to offer one-on-one counseling to their members throughout this crisis.
Financial counseling is another example of how credit unions have been focused on helping their communities well before COVID-19.
Waiving Fees
Though it seems counterintuitive, many CUs were encouraged to waive fees. Eligible fees include ATM withdrawals, early withdrawals on timed deposits, credit card balances, loan balances, late payments, and more.
Increasing Credit Card Limits
CUs are increasing credit card limits to accommodate the lack of cash flow from shutdowns and decreased capacities. This solution does not include all memebrs. However, increasing credit for trusted borrowers creates business for the CU and eases the financial burden temporarily for members.
Deferring Payments
Similar to the pandemic relief loans, credit unions are also generously deferring monthly payments. Members are grateful for the choice to defer a payment for one month, giving them time to recover lost finances.
IMS Integration’s software includes Skip A Pay, which can help your credit union easily process these deferments.
Bonus: Small Business Service Opportunity
Nearly six in ten small businesses said they’re at least somewhat likely to look for a new banking relationship in the next year, according to this Forbes article. Many of these small businesses accept upwards of 10 different payment types. But why does this matter to your credit union?
Processing these payment types through a third-party service includes fees. These fees make it even harder for small businesses to turn a good profit. And as COVID measures continue to affect the economy, small businesses are looking for ways to cut costs. This is where the opportunity comes in: credit unions should consider providing accounting and payment services to SMEs (small- and medium-sized businesses).
Offering these services generates business for you and provides your local business owners with a valuable service.
Final Thoughts
Though it feels like things are shifting toward a new normal, many of your members are still struggling to adapt to the changes caused by COVID-19. By now, nearly all government-mandated relief efforts have ended.
This creates a huge opportunity for your credit union to re-evaluate programs and pick up that slack to help your communities bounce back even faster. These efforts also generate business, so it’s really a “help us help you” situation.
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IMS Integration offers unique solutions of its own for credit unions. Contact us to learn more about how our member-facing web solutions can help you better serve your members.
