There are a number of challenges currently being faced by financial institutions due to the novel coronavirus (COVID-19).  This has further been exacerbated by the perceived lack of confidence in various economies to weather the long term effects of this virus.  It is thus anticipated that Credit Unions (CUs) may be bombarded with an increase in the number of transactions over the next few months. It is therefore imperative that CUs be in a position to assist members who may be fearing the worst, whilst safeguarding the viability of their financial institution in the long run.

The following recommendations are therefore made to assist CUs during this uncertain time:

 

Steps to take in the event of a cash run on your Credit Union

  • Analyze the cash and liquidity positions of your Credit Union
  • Analyze the sources of liquidity and reach out to your Regulator, local or Central Bank to discuss any possible relief strategies
  • Place proper limits on cash withdrawals (i.e. per day/per week/per month or any combination)
  • Work closely with your Regulators to determine if they will impose moratoriums on withdrawals 
  • Be aware that deposit insurance may be used as a means of security for the cash
  • Consider the difficulties involved in replenishing your ATMs during this crisis and have contingency plans in place
  • Reinforce the fact to members that their funds are safe in the Credit Union
  • Educate members that hoarding of cash at home is not safe

Let us continue to make a difference in the lives of our members in 2020.

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