June 2020
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Welcome to the June 2020 Priority Report. We are starting to see our state slowly open back up in light of the lifting of the “Stay Home” order and the re-opening of various businesses. Here at MCUL and CUSG, we continue to work remotely for the time being. We hope that as jobs slowly start to re-engage, your members can start to feel some ease in meeting their obligations.
We suspect that the shutdown is going to continue to have a financial impact on your members as stimulus funds are exhausted and some jobs remain eliminated. MCUL will continue to work with our credit unions in collecting information, hearing your issues and concerns and providing solutions.
We are reaching out to credit unions on a regular basis in order to share data and unique stories that showcase how all of you are making an impact. Having this information will assist us in promoting how credit unions continue to be a constant in their community and a creative force for members. We encourage you to continue passing on your credit union story so we can gather information and share your outreach to legislators and regulators in Lansing and Washington, D.C.
Before moving onto detailed department updates, I wanted to take a moment and acknowledge the difficult time our country is experiencing in the wake of the death of George Floyd in Minneapolis and so many others who have been lost or injured due to racial injustice. Our mission at MCUL and CUSG is to provide an environment for credit unions to do what they do best – building stronger communities. We know our Michigan credit unions exemplify “people helping people” and that you join us in our commitment to zero tolerance for racism in our workplace, communities and homes. Our team stands in support of people of color and those fighting to make our country a better place for all. Black lives matter.
Now, onto our advocacy agenda. MCUL has actively engaged our federally elected officials, who are working hard to provide effective pandemic responses, to ensure credit union priorities are considered and addressed. In mid-May, the U.S. House completed its work on a Phase 4 emergency stimulus bill called the HEROES Act. The $3 trillion spending bill includes, among other things, nearly $1 trillion in funding for state and local governments, establishes a $200 billion Heroes Fund for essential workers and extends weekly $600 federal unemployment payments through January 2021.
Overall, the bill is a mixed bag for credit unions. On the positive side, the bill establishes a Homeowner Assistance Fund and provides $75 billion in funding for it. The program would provide direct assistance to those struggling to pay their mortgages, property taxes, property insurance, utilities or other related expenses. The bill also includes $100 billion for rental assistance.
We are pleased that $1 billion in funding for the CDFI Fund and the text of the SAFE Banking Act were also included in the bill. Finally, the House included several much-needed reforms to the PPP program in the bill, including provisions that would, among other things, ensure PPP loans are not treated as taxable income and create set-asides to ensure small businesses with 10 or fewer employees, non-profits and CDFIs have access to program dollars.
Now for the provisions that concern us. The bill establishes moratoriums on foreclosures, evictions, consumer debt and small business debt. It also suspends negative credit reporting during major disasters (not just COVID-19) and requires the CFPB to establish an ambiguous process to facilitate reporting.
Following passage by the House, the HEROES Act was sent to the U.S. Senate where leadership promptly indicated the bill was DOA. With regard to a Phase 4 bill, the Senate is taking a wait-and-see approach, wanting to evaluate how the nearly $3 trillion in funding and the programs authorized under previous emergency spending bills have impacted Americans and the economy before acting. The expectation is the Senate will wait until July before it seriously considers a bill.
While the House and Senate are currently stalled on a Phase 4 bill, both chambers did recently come together to pass bipartisan legislation, which was signed by the President and includes much-needed PPP reform. More information on those provisions can be found on MCUL.org.
The PPP Flexibility Act addresses many of the concerns raised by small businesses and lenders and we are encouraged that Congress acted in a quick, bipartisan manner. However, we believe additional reforms are necessary, including the need to establish a reasonable dollar level under which PPP loans to the smallest businesses receive automatic forgiveness.
We will keep you apprised of developments around PPP, Phase 4 legislation and other credit union federal legislative priorities.
STATE ADVOCACY AGENDA
On the state side, the Governor and the state legislature continue to focus the majority of their time on addressing the ever-changing landscape in relation to COVID-19 as well as the 2021 budget. Executive orders are being issued by the Governor weekly to help provide continued guidance on re-engaging and re-opening the state. Gov. Whitmer recently allowed Regions 6 & 8 in the state to enter phase five of the Mi Safe Start Plan, and the rest of the state is now following suit.
She also issued Executive Order 2020-114, which provides even greater guidance on re-opening. This is a great resource for credit unions as it pertains to keeping workers safe while working from brick-and-mortar locations. Detailed information on that and all other orders can be found on MCUL.org.
Finally, on the legislative front, our team is working to oppose HB 5097, which would expand payday lending offerings in the state. Our team has communicated our opposition with the committee and is working to educate the rest of the Senate as well.
On the appropriations front, we are working to get some of our priorities in the 2021 budget, including funding for the Michigan Saves program and for E-Recording upgrades across the state. With the budget deficit being over $3 billion for the budget, our team knows that this is an uphill battle, but we’re working to at least put the framework in place to ensure that these projects are funded if not this year than in 2022.
REGULATORY COMPLIANCE
On the Regulatory side, as part of the efforts of the COVID-19 Response and Recovery Taskforce, MCUL will work with the members of the Examination and Supervision Committee and representatives of the taskforce to engage with DIFS and NCUA. We are especially interested in discussing concerns with examinations, particularly those during and immediately following the crisis. We will specifically look to the industry to gather feedback and recommendations on key issues, including net worth ratios, CAMEL ratings and many other modifications done to assist members through the pandemic and beyond.
Credit unions can also expect another examination survey to evaluate how the examination process has differed during and after the crisis. Our Regulatory and Education teams are working to provide a webinar roundtable for BSA and Risk Officers to discuss the recent unemployment fraud and credit union best practices. The information gathered here will be compiled for a second webinar with industry experts to further develop practices and resources for the Michigan credit union industry.
Our collaborations with CUNA continue to seek clarification and guidance regarding change-in-terms notices for fees waived during the pandemic. Sending these notices while credit unions were working to help their members would be very burdensome and costly to the industry.
CONSUMER AWARENESS
Moving over to Consumer Awareness, phase two of the CU Link campaign is currently in production. The new ads, which are expected to launch June 29, are structured to offset fatigue and help transition communications from Covid-specific back into credit union benefit messaging. This next chapter of the campaign will maintain a tone of tempered optimism and empathetic support while matching the visual tone from CUNA’s updated Open Your Eyes campaign.
Phase two emphasizes that credit unions have always been there, through life’s toughest challenges and we continue to be a trusted partner across Michigan, providing stability and service for our communities.
We're investing more than $900,000 into digital media through the remainder of the year, with various messages released in quarterly phases. Look for updates on our MCUL.org and CU Link website, as well as our social media pages later this month.
As you know, the Michigan Credit Union Foundation has been helping to boost the credit union difference in Michigan, focusing recently on mobilizing an additional $110,000 for community crisis support. So far, 28 Community Crisis Support Grants totaling $101,707 have been awarded to supplement credit union and chapter pandemic response activities improving the financial health of their communities.
The recent catastrophic flooding in the Midland area presented an additional crisis and hardship for credit unions, families and businesses in that area. MCUL and MCUF quickly responded by providing $10,000 each to help with flood relief responses led by the Mid-Michigan Chapter and the area credit unions. MCUF began fundraising to add to this support and as of June 1, 39 credit unions, three chapters and several individuals have contributed to this fund for a total raised so far of $96,000. The area credit unions anticipate being able to help more than 200 impacted members with these funds.
MCUF is also working to help credit union members and board members affected by the flooding. MCUF has received a commitment of funding from the National Credit Union Foundation for up to $50,000 to be used specifically for this purpose. We’re working quickly with area credit unions to approve and fund applications.
Lastly, a new teen budgeting and life simulation resource is now available to Michigan credit unions with support from MCUF. Balanced Life is a version of a financial reality fair that can be conducted in smaller classroom settings and can be presented remotely by webinar or other electronic delivery methods. This resource is free to small-asset-size credit unions and is available to larger credit unions at a discount.
EDUCATION
Over to Education, our team has been working closely with a number of hotels and venues across the state where events were planned throughout the year. Like all of you, we have been following the Governor’s executive orders and reading the fine details to understand how the six-step pandemic plan will unfold.
While we were hopeful that this year’s Annual Convention & Exposition could be rescheduled to the fall, we have had to make the difficult decision – but the right decision – to cancel the event for 2020. The same decisions needed to be made for the Executive Summit and the Fall Leadership Development Conference.
However, we’re excited to pivot and offer some smaller in-person events located around the state, still ideal for those who would normally attend these other larger events. These “Operation Reconnect” opportunities will allow you to come together with peers, leave with valuable information and participate in proper socially distanced activities. Stay tuned for more information on these new events.
Meanwhile, be sure to follow MCUL.org for a variety of online learning resources that are being continually added to our training line up. We appreciate the kind words we’ve been receiving from many of you and look forward to when we can be gathered for the 2021 Annual Convention & Exposition, next June.
Additionally, MCUL and CUNA are once again working together to recognize the ways credit unions support their communities and members through the 2020 CUNA Awards. These awards showcase all the great accomplishments and hard work credit union employees have invested into our cities and state. The deadline for submissions is July 24 and may include the credit union’s outreach from July 2019 to July 2020. Be sure to submit your nominations at MCUL.org.
CU SOLUTIONS GROUP
While businesses and communities across the U.S. are cautiously reopening, CUSG continues to develop and expand our solutions at a business-as-usual pace—because we understand that while credit unions’ needs may have evolved, they still require speedy delivery and implementation of the products and services we provide.
In an effort to smooth this transition with credit unions, our Marketing Solutions division is hosting a Back-to-Business Webinar Series through the end of June. This series will focus on topics like gathering and acting upon member feedback during this unprecedented time, ways that credit unions can maximize member engagement, and tips on marketing optimization and channel delivery in the new normal. Visit our website to register for this free series and gain access to more educational content from our Marketing Insights Network.
Also concerning member feedback and engagement, MemberView, the omnichannel voice-of-member solution of MemberXP, will soon include open text analysis. This powerful tool will provide automated sentiment reporting on all comments submitted as member experience feedback through the platform. This gives a credit union richer insight and helps them to prioritize their efforts for member experience improvement, including and beyond COVID-19 communications.
Finally, our Marketing team has enhanced the user experience of the Love my Credit Union Rewards web app, making it easier than ever to navigate and access the growing array of member offers. One of these new offers is Calm, Apple’s 2017 iPhone app of the year. This meditative app promises to encourage more restful sleep, boost confidence and reduce stress and anxiety through guided meditations, soothing music and even bedtime stories.
Like all our divisions, the CUSG Technology Solutions team has been focused on developing and improving meaningful virtual tools for remote member engagement. We’ve recently partnered with TimeTrade to bring their intelligent online appointment scheduling and queuing software to our credit union audience. Both CUSG and TimeTrade believe the inherent distance of digital delivery doesn’t mean your credit union has to sacrifice a highly personal experience.
This past month, Technology Solutions also announced a new partnership with Abrigo. Abrigo’s Paycheck Protection Program solution helps to streamline and simplify the loan forgiveness and administration process for SBA credit unions. Despite the lack of clear guidance and overall readiness by the SBA, credit unions have worked quickly to process applications and prepare for loan funding. But due to capacity restraints and concerns over fraud exposure, most credit unions have focused on existing client relationships and needs. By partnering with Abrigo, CUSG is helping credit unions extend these critical services and address the needs of new small business borrowers as well.
Despite challenges faced by credit unions in the first half of the year, CUSG Performance Solutions has continued to find ways to align and integrate our strategy, compensation and performance management software so credit unions can continue to foster a culture of high-performing and engaged team members. Because professional development is such an important part of this equation, we began a relationship with CU Training late last year. Realizing the full potential of their learning management solution and how it could be integrated into our current suite of HR products, we’ve since acquired full ownership of the company, and are now beginning to both enhance and add more content to The Learning Center to make it the most engaging learning management solution in the credit union space.
Our Strategic Advisory team similarly understands how credit unions’ strategic goals have shifted in recent months but has continued to innovate service delivery methods and create up-to-date content. For the Compliance Cares series—part of our eAdvisory Services—two new topics were added in the last month: Paycheck Protection Program and Delicate Member Issues.
To help credit unions in this time of transition, a video, titled Getting Back to Normal, has been made available, as well as a Knocking COVID-19 Out of the Workplace staff training kit. This kit provides a training video for staff addressing CDC recommended topics, a shareable link for credit unions to use for remote staff and an onsite training guide to reinforce the topics as staff returns to work. For those seeking additional content, the CU Risk Intelligence website has new risk management and compliance how-to videos and newsletters.
That’s it for this month’s report. I hope all of you are remaining safe and sound as our state begins to start feeling a little bit more like normal.
Until next time, feel free to reach out to me if you have any questions or concerns regarding how we can help you best serve your members.
Thanks for watching.