Last week I interviewed three Credit Union Chief Audit Executives from across the United States to see how they are altering their daily activities and audit plans due to the Coronavirus pandemic. This week I bring you two more CAE interviews to help provide ideas of how to best serve your Credit Union during this trying time. I’ll also give you some key takeaways to help draw inspiration from your colleagues. If you haven’t yet read Part 1 of this series, take a look at it here.
Before we delve into the insight from our colleagues, let’s take a look at some key statistics about how COVID-19 is infecting people across the world. At the time of publication, the World Health Organization reports 524,514 confirmed cases of COVID-19 across the United States and 1,773,088 confirmed cases in the world. In New York State, where I live, there are currently more cases of COVID-19 than any country in the world. The good news is that it appears that all our efforts of social distancing are working. The curve is beginning to flatten and we have hope that hospitals will not become drastically overwhelmed and many lives will be saved by the precautions we are taking.
Now, let’s see what Julie Wilson of iQ Credit Union and Tom Cosby of Crane Credit Union have to say about how they and their Credit Unions are addressing this pandemic.
Julie Wilson – Washington State
Julie is the Vice President of Internal Audit and manages two other Internal Auditors at iQ Credit Union (1.3B in assets) in Vancouver, Washington. Washington State was one of the first states hit with many cases. iQCU had a robust Disaster Recovery Plan in place before the pandemic and regularly completed tabletop exercises. However, being faced with the reality of a disaster is very different than completing an exercise.
The Credit Union is encountering reactions from members that they could not have anticipated. Many members are in panic mode, and several have requested cash withdrawals of $50,000-$100,000. They have also seen a large increase in call volume and requests for skip payments and loan refinances. A few members have also voluntarily turned their vehicles into the Credit Union without missing a payment because they know they will not be able to make payments on the vehicle in the upcoming months.
Like most Credit Unions, iQCU has closed branch lobbies and closed down locations that do not have drive-up available. Employees from the closed branches are helping staff at the drive-up branches and fielding additional calls from members. Each teller is always using the same station, cleaning it regularly, and is using hand sanitizer often. Branches do offer appointments if absolutely necessary. However, they are requesting electronic signatures as much as possible. To verify identity on certain in-person transactions, members are walking up to the window or using the first drive-through lane so tellers can appropriately identify them.
Julie has implemented a plan for Internal Audit to be as unobtrusive as possible until we are “on the other side of the curve”. Like most, her team will not be conducting branch audits during this period. Her team will still conduct audits that involve back-office employees. However, she is not issuing reports or requesting management responses. Julie and her team feel like the focus needs to be on supporting members during this uncharted difficult time. Of course, anything her team finds that is high risk, systematic, or a compliance risk will be addressed with management immediately.
Julie has also reached out to management to offer the services of her staff to help answer phones if necessary. Although there is currently no need for their assistance, if the need arises, they will be available to answer phones and give members information or direct them to the correct employee or location to fulfill any transaction request they may have.
Tom Cosby – Indiana
Tom is the Internal Auditor of Crane Credit Union ($630 Million in assets) in Indiana. He is the sole Internal Auditor at CCU and is also a member of the ACUIA Board of Directors. CCU has a Disaster Recovery Plan and conducts tabletop exercises on an annual basis.
The biggest change at CCU due to the COVID-19 pandemic is the closure of branch lobbies. Currently only drive-through lanes are open. However, Members can make appointments to work with the branch manager, if necessary. The Credit Union has also created a page on their website detailing the changes they are making to protect the safety of their employees and members.
CCU has seen a large drop in activity on indirect auto loans due to the crisis. However, mortgage loans and business loans are on the rise. They are also promoting several “Member Assistance Solutions” such as Skip Payment, Loan Assistance, and some fee waivers.
Due to the pandemic, Tom has decided to suspend branch audits until further notice. He is also focusing on audits and making changes to the audit plan so those engagements he can do remotely move up on his audit schedule. Additionally, management has asked him to reschedule certain audits, but has not requested any other assistance at this time. He is happy to reschedule some projects and stresses that it is important to be flexible during this time.
All of the Credit Unions I talked with have shut down branch lobbies in an effort to protect the safety of their employees and members. Many are limiting face-to-face interactions with members to appointments that are absolutely necessary.
Internal Auditors are now working from home. Additionally, like Dean Atchison’s Supervisory Committee, many are learning the benefits of some meetings being conducted over video chat.
Internal Auditors are doing what they can to adjust their audit plans so that key member facing departments are not faced with additional pressures. While many Credit Unions are completely halting branch audits, Athena Clingman (Part 1) had some great out of the box ideas for how Internal Audit can gain some assurance that risks are appropriately managed.
The pandemic is a great time to show that Internal Audit can be a team player, as Elizabeth Bagwell pointed out in Part 1. Offer your services and/or the services of your staff to help front line employees, if they are overwhelmed. This can be a wonderful way to build relationships and gain some good will within your Credit Union.
Consider Julie Wilson’s suggestion of postponing the issuance of audit reports until after we are on the other side of this pandemic. It will help ease the burden of management so they can focus on members and keeping the Credit Union functioning at a high level.
Remember, we will get through this and as Tom Crosby said, “it is important to be flexible” during this pandemic.
I would like to thank everyone who agreed to be interviewed for this two-part series. You gave us some great inspiration for how to deal with these constantly changing times.
How are you adjusting to the effects of the COVID-19 pandemic? Do you have any advice for our readers? Please share in the comments below!