CU STRATEGIC PLANNING RELEASES RESULTS OF CDFI COVID-19 SURVEY
CU Strategic Planning, the CDFI thought leader and developer of more than $120 million in CDFI grant awards for credit unions released the results of a survey conducted March 12 to 20 of CDFI credit unions submitting CDFI applications before April 21, 2020 for funding. The findings include:
100% of the CDFI credit unions consider COVOD-19 as a trigger for their disaster planning
100% have adjusted policies and procedures in the last two weeks to meet the current and anticipated financial needs of members
32% of the CDFI credit unions are concerned that NCUA examiners will not follow the NCUA Board’s notice that “prudent efforts that are consistent with safe and sound lending practices should not be subject to examiner criticism.”
The 2020 CDFI credit unions identified potential risks:
Concerns over members experiencing unemployment and lost wages
Quarantine of staff and staff experiencing child care challenges that impact service to members
Liquidity risks, with some CDFI’s reporting experiences with older members withdrawing large or all balances
Earnings and increased delinquency
The 2020 CDFI credit unions shared their strategies to mitigate risk, including:
Workplace flexibility – allowing staff to work from home
Shifting members to drive throughs, ATMS, on-line banking and digital Docu-sign options
Forbearance programs for member loans, with more than 85% indicating these options exist in current policies
Small dollar loan programs and promotions designed to meet immediate member challenges
High capitalization designed for economic challenges.
The 2020 CDFI credit unions also shared the following enhancements to product underwriting, features, collections or payment terms:
Allowing members to skip a payment
Fee waivers on all access points to encourage access that avoids branch closings
Deferments for loan payments, initially for 90 days, and potentially for another 90 days (adding to the end of the loan period)
Modifications for mortgage payments for mortgages held in portfolio
Assisting members in applying for unemployment benefits, SNAP (food assistance) and/or unemployment insurance for loans
Relief loans – no initial payments for 60 days/30days
12-month emergency loans
One credit union is paying for all sick/time and PTO that any staff member needs to take during the COVOID-19 crisis due to illness or due to child care issues.
The survey was conducted of credit unions applying for CDFI grant funding before the April 21, 2020 deadline. Congressional action on supplemental appropriations for CDFI and NCUA’s Community Development Revolving Loan Fund could come up within the next two weeks. CU Strategic Planning has advocated for more than doubling the 2020 CDFI appropriation, adding rolling funding for an additional $500 million and nearly tripling the CDRLF to $5 million.