By Chris Joy
No one can be completely prepared for a natural disaster that may impact us at one point or another. Recent hurricanes, earthquakes and fires have reminded us of that. The unknowns and uncontrollables – severity of impact, power, availability of fuel and household goods, necessity of travel and medical attention, just to name a few – can wreak havoc for even the best prepared individuals and businesses. However, there is one universal certainty in these situations: the need for people to access cash and credit frequently, and in amounts that are likely higher than their usual needs.
In the credit union space, preparing to deal with disaster-related events should be part of any credit union’s playbook. Consideration should be given to how to help members in the most immediate way possible by making it easier to access and use cash and debit and credit cards in an emergency situation.
Below is a list of options to consider as part of your credit union’s disaster preparedness plan. While each comes with an associated cost, the benefits of providing such a valuable service far outweigh the costs. The goodwill and loyalty generated among thankful members will extend far beyond the immediate crisis or hard costs.
- Enable no-fee, skip-pay programs for qualified credit card accounts (and other consumer loans like auto and unsecured personal loans)
- Waive any replacement card and rush fees for both debit and credit cards
- Temporary (or permanent) credit line increases – including any separate cash advance limit
- Waiver of any credit card cash advance or balance transfer fees
- Suspension of credit card late and return check fees
- Increase any daily withdrawal, transactional and dollar volume limits for both credit and debit cards
- Suspend non-credit union ATM fees and refund surcharges assessed by other financial institutions
- If a widespread ATM outage exists, message members to remind them of the availability of surcharge-free networks (if applicable), credit union shared branching locations (if you are evacuating) and getting cash back at retail merchants
- Fully stock ATMs with cash (versus partial stock) and temporarily utilize a higher denomination of currency ($20 bills versus multiple denominations)
- If you have domestic geographic limitations of card use or fraud controls based on domestic geography, consider loosening or removing them
- Protect members’ credit scores by providing disaster codes and comments when reporting credit data to a credit bureau; establish hardship and collection plans that can include interest rate decreases, re-aging and no payment required programs for up to 90 days, where viable, and determine if holding some accounts for charge-off based on circumstances is warranted
- Include debit and credit card changes/actions as part of any key member communications; additional communications or linkage can be provided by way of email, social media, statement messages and text messaging
- Related digital services that can be promoted include E-statements, online/mobile banking, bill pay, online cash advances (where available) and adding authorized users for credit cards
Credit unions should consider establishing a relationship with a third-party partner that offers call center support services, which reroutes cardholder calls to these partners during situations in which credit union facilities are non-operational or key credit union personnel are unavailable. PSCU provides comprehensive 24/7/365 member support through multiple call centers located throughout the United States.
In addition to having a solid disaster plan in place, swiftness and accuracy in implementing changes are essential to avoid further disruption. Quick decisions must be made about the extent, duration and temporary nature of any interventions. These options provide credit unions with the means to take quick action to address one of the most important needs of members in a time of crisis: urgent, easy and fair access to cash and credit.
Chris Joy is a Principal Consultant with the Credit Card practice at PSCU’s Advisors Plus. Together, PSCU and Advisors Plus’ products, financial services solutions and service model collectively support over 850 Owner credit unions representing more than 20 million credit, debit, prepaid, online bill payment and mobile accounts; protect over 2 billion transactions annually from fraud; and optimize credit union performance and growth. Chris uses his 30+ years of experience to advise credit unions on issues involving portfolio growth, profitability enhancement, member reward programs, and the competitive and regulatory environments. For more information, visit AdvisorsPlus.com.