April 1, 2020

Banks and Credit Unions Issue Joint Statement to Reassure Consumers

EXCERPT:  Credit union and bank associations are teaming up to reassure consumers they are healthy and available to help amid the current coronavirus pandemic.

Banks and credit unions recently issued a joint statement to reassure consumers that their money is still safe amid the coronavirus pandemic.

During this time of crisis as a result of the continued coronavirus pandemic, Americans across the nation are understandably fearful, not only for their health, but for their finances, too. Workers are being laid off, and business owners are seeing their doors shut in an effort to slow the spread of the virus and curb the crisis.

But efforts are being made by both government entities and financial institutions to help provide the financial relief many Americans need right now as well as to reassure consumers that financial help is available. Banks and credit unions are even teaming up to provide consumers with the peace of mind knowing that the financial services industry is robust enough to weather this pandemic.

Banks and Credit Unions Working Together to Reassure and Help Consumers

Just recently, credit union and bankers associations in Massachusetts and Maine issued joint statements reassuring their members that all is well in the world of banking and that consumers can feel secure with their bank deposits.

People have traditionally put their money in accounts with banks and credit unions for a reason: they're safe havens. And both types of financial institutions want consumers to know that they continue to be secure for deposits and holdings. Some people may be withdrawing much of their savings from bank accounts and hoarding them at home out of fear that banks may collapse, and the world may end and as a result of COVID-19. But such fears are unfounded, and in fact, taking such a drastic approach puts consumers at much higher financial risk.

Take the Y2K situation, for example. Many people mistakenly believed that computer systems across the globe - including within banks - would crash at the stroke of midnight on January 1, 2000, out of concerns that "00" would not be recognized. In turn, people and even small businesses began emptying their bank accounts for fear that financial transactions would not be able to be completed. Such issues never ended up occurring.

Consumers can rest easy knowing that their savings are secure in bank and credit unions accounts.

Some people might be considering mimicking the actions of those 20 years ago. But banks and credit unions are here to say that such fears are baseless, as financial institutions remain strong and secure.

In fact, we are seeing somewhat of the opposite effect taking place these days, as many credit union members are putting more money into these financial institutions. And that's a good thing because banks and credit unions stand ready to handle these trying times and offer financial assistance to their clients to help them come out the other side of this pandemic as unscathed as possible.

Financial Institutions Playing Their Part to Slow the Spread of COVID-19

Everyone needs to do their part to flatten the curve and curb this pandemic. In addition to social distancing and other practices being undertaken by individuals and businesses, banks and credit unions are also playing a role. Physical access to branches are being closed off in many parts, but drive-thru teller services are being offered.

But in addition to that, banks and credit unions are also working together to educate people about the security of all the banking options that are available, particularly during this difficult time.

Protecting Financial Institutions While They Protect Consumers

Banks and credit unions may be doing what they can to help consumers in their time of need and reassuring them that their accounts are safe throughout this pandemic. But financial institutions should also be prudent when it comes to protecting their loan portfolios, and selling off risky assets and acquiring stronger ones will help. Even during this troubling time, Garnet Capital can help facilitate these transactions to help banks and credit unions hedge against risk.

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