"The longer that this goes on, it's a lose-lose situation for everybody, including us.”
By Tina Orem, CU Times | January 23, 2019
Member-aid programs have rolled out across the country in response to the government shutdown, but for many credit unions such as Alexandria, Va.-based Democracy Federal Credit Union, which caters heavily to federal workers, those programs may have an especially big influence on the financial health of the member base. That’s putting a lot of pressure on executives and leaders to deliver top-notch operational planning, coordination and execution.
Democracy FCU which has $149 million in assets and about 14,700 members, serves employees of the Department of Health and Human Services, the Department of Education, the Social Security Administration, the Federal Energy Regulatory Commission and the FDA, among other groups. There have been so many government shutdowns over the years (21 since 1976, Democracy Operations Manager Antoine McStay noted), that in 1996 the credit union created a “National Event Program.”
“The National Event Program basically gives us the flexibility to activate this program at any time based on any type of shutdown, any type of emergencies: weather, hurricanes, anything like that,” he explained. For the current shutdown, the credit union is offering loan extension and payment deferment arrangements for up to 90 days, as well as 0% loans for up to six months. Free financial counseling is also available. “We use our regular lending guidelines to review the new member’s information, but we kind of limit the information that they have to give to us considering the situation,” President and CEO Ken Cahoon noted.
“Democracy has used email, press releases, social media and banners on its website to spread the word about its programs,” Director of Marketing Allyson Teevan said. “The resulting queries often revolve around how to become a member, how to participate in the furlough programs or how to get in touch with a person who can help with furlough-induced financial hurdles,” she said.
“Branch traffic has been stable so far, but call center volume is up — and it’s clear what’s prompting many of those calls,” McStay added.
“About 85% of the overall calls coming in currently are specific to inquiries regarding the shutdown and the services that we’re offering that can benefit our members’ needs,” he said. The credit union took steps to prepare the call center when the shutdown became imminent, McStay noted.
“What we did was educate our staff as to what the program offers, specifically regarding the guidelines and the criteria and specific answers to questions that members may have regarding the shutdown,” he explained. “We also reached out them to just let them know our overall lending guidelines, because not all the members are going to take advantage of the National Event Program. They’re actually going to be taking advantage of the existing consumer loan products that we have, so we somewhat gave them a refresher of the products that we’re offering, of the rates that we’re offering so that they could be a little more prepared to answer those types of questions that are coming in.”
Members are showing interest, but prospective members have also come calling, Cahoon noted. That may mean more members for Democracy FCU, but like other credit union leaders, Cahoon was more eager to see the shutdown end.
“We’re here to help, so either way we’re going to assist our members as needed. But the longer that this goes on, it’s a lose-lose situation for everybody, including us,” he said. “So not having an end in sight is a little concerning, but we’re still going to be out there still trying to lend the money out and still trying to help out if they need some deferment. At the end of the day when this is over, they’re going to remember that we helped them.”