What impact will the COVID-19 pandemic have on consumer and cooperative finance in the coming months and years, and what role will credit unions play in mitigating its effects? The third part of this Special Report describes the landscape of critical factors credit unions should consider as they revise their longer-term strategic plans and operational models to best confront post-crisis risks, opportunities, and member needs.
What is this research about?
In the first two parts of our Special Report series, we outlined some of the early socioeconomic effects and likely impacts of the COVID-19 pandemic, and how the crisis could affect consumer financial services, especially credit unions. For our concluding entry to this series, we take a more speculative turn to imagine possible pathways in the near, medium, and long term. No one can predict the future with perfect certainty. Rather, our goal is to offer a number of different scenarios that could emerge in the post-pandemic world (whenever that might be).
The following report outlines some possible futures for American society, for consumer financial services, and for credit unions. They are divided into three “types” of futures:
- Social, cultural, and technological
Commentary on each type is organized around themes and trends where we believe credit union leaders should focus their future planning and strategies. Some have become more urgent since March, while others have been simmering for much longer. Each section ends with a projected spectrum of scenarios, with the future state likely falling somewhere between the two poles. Understanding what can be done in the here-and-now to prevent the worst possible future outcomes will be critical going forward.
What are the credit union implications?
There is no denying that the COVID-19 crisis has ushered in a period of upheaval with significant implications for financial, political, social, cultural, and technological futures. The fact that it has coincided with arguably the largest global civil rights movement in modern history only serves to underscore this fact. While it may still seem far off at the moment, we must begin preparing for a post-COVID world now.
In short, the near future appears very uncertain, and that uncertainty extends into the medium and long terms. Credit unions have a mandate to help members achieve some measure of stability in these trying times, and the credit union system is uniquely positioned to do so. After all, the U.S. credit union movement was born out of economic inequality and obstacles to fair, safe, and affordable credit, culminating in the Federal Credit Union Act of 1934 as an integral part of addressing the Great Depression.
By staying true to the principles of cooperative finance and member ownership, we believe that credit unions can help individuals and communities weather these latest storms, and that the credit union system will emerge stronger by doing so.
Part one presents early analysis of the economic and social disruptions caused by the crisis and outlines the likely consequences many people will confront going forward. Part two reviews how the crisis may affect financial services providers, particularly credit unions.