Banking

Week ahead: CUNA disbands COVID recovery task force

The Credit Union National Association has disbanded its Credit Union System COVID-19 Restart and Recovery Task Force, the trade group announced Monday, citing ongoing progress with vaccination efforts and forecasts that the nation is on track to return to some level of normalcy by mid-year.

The task force, which was assembled in June, held its final meeting in late January and plans to issue a report soon. Greg Michlig, CUNA’s chief engagement officer, said during a CUNA’s weekly press call that the group’s work was primarily focused on addressing members’ and employees’ needs during the pandemic — particularly in the area of financial wellness — and studying the acceleration of digital banking adoption brought on by the crisis.

The work on digitization is set to continue with the launch of a new task force similar to the COVID group, Michlig said. Invitations have gone out to credit union leaders — including CEOs and chief information officers — along with representatives from state credit union leagues, vendors and others. Mark Sievewright, founder of the consultancy Sievewright and Associates, has also been brought on board to help lead the working group.

Michlig said CUNA has also taken steps to ensure participants represent a diverse range of racial and ethnic backgrounds.

“I believe strongly that inviting people of different backgrounds and with different perspectives will help better inform our work,” he said in an email. “We have identified credit unions based on their expertise in digital solutions and technology, and have invited either the CEO or a designated executive as determined by the CEO. Within that group, we issued invitations to a diverse group of CEOs which include people of color who we hope will be able to join our working group.”

The task force is expected to begin meeting in January and will hold monthly meetings, though that cadence could change based on needs. Michlig said the intention is that the new group will focus on finding ways for credit unions of all sizes to collaborate in order to broaden the adoption and availability of digital services across the industry.

On the legislative front, the Senate begins its impeachment trial this week against former President Donald Trump and the House Financial Services Committee will hold a markup on budget reconciliation legislation that is likely to include additional coronavirus relief. Industry groups have outlined some of their priorities for any new relief legislation, with the National Association of Federally-Insured Credit Unions calling for additional capital flexibility for federally chartered institutions, liability protections for employers, extending loan maturity limits, relief under the member business lending cap and more.

Any new COVID-related legislation is also likely to mean additional relief payments for consumers, and President Joe Biden has said he wants the public to receive checks for as much as $1,400 per person. Those funds could have a big impact on credit union balance sheets.

While end-of-year data from the National Credit Union Administration won’t be released until sometime next month, the latest economic estimates from CUNA show a surge in savings throughout 2020, which any new stimulus payments would likely increase. The industry saw loan growth of about 5% last year, which was “propelled almost exclusively by first-mortgage growth, because of the massive wave of mortgage refinancing,” said Mike Schenk, the trade group’s chief economist, adding that mortgage growth was about 11% higher in 2020 than in 2019.

Loan-to-share ratios continued to decline, however, finishing the year at 73.6%, Schenk said, the lowest level since 2015. And multiple checks from the federal government — combined with expanded unemployment benefits and other economic stimulus measures at the state and federal level — helped improve the industry’s asset quality, said Schenk. Credit unions finished the year with a 0.61% delinquency ratio, nine basis points better than where things ended in 2019.



 

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