NAFCU Journal May June 2021

28 THE NAFCU JOURNAL May–June 2021 to use a third-party facilitator to run the meeting—someone who can stretch and challenge everyone’s thinking in order to keep the conversation moving forward.” Although no one could have imagined a worldwide pandemic and the resulting effects on the economy, Seibert points out that the experience that credit union leaders gained throughout the years working with hypothetical scenarios pro- duced a “muscle memory” that enabled them to quickly identify what needed to be done and how. “We’ve gone through this process so many times, we were able to model a few different situations and identify the most responsible decisions to make.” USALLIANCE did not have a planning scenario that specifically addressed a pandemic-induced economic shutdown, but they did have plans that could be triggered by high unemployment or steep corrections in stock market indi- ces that resembled the pandemic and helped their team mitigate risk quickly. “We focused on the early warning signs,” says Wheeler. “For example, we saw the likelihood of high unemployment early on and anticipated an increase in loan defaults, and we met to adjust qualifica- tions for loans.” He adds, “It was diffi- cult to predict the effect—or issuance of—stimulus payments and lowered spending, so things went much better than we expected.” Although stress testing is a requirement for all credit unions, the regulations are not overly prescriptive, says Wheeler, a former case officer and examiner for NCUA. “Every credit union and balance sheet is different, so requirements that are appropriate for one credit union may have unintended consequences for another,” he says. “The most important part of stress testing is the process of planning so that people know how to evaluate risk and develop strategies,” says Wheeler. He points to one of his favorite quotes by former Pres- ident Dwight D. Eisenhower, when he was overall Commander of Allied Forces in WWII: “In preparing for battle I have always found that plans are useless but planning is indispensable.” I believe that we’ll all look back on 2020 and realize that this is the year that changed our members’ behaviors, as well as our industry. GINA SEIBERT, ASSISTANT VICE PRESIDENT OF FINANCE FOR PSECU ...NAFCU has been talking with the National Credit Union Association (NCUA) about greater investment authority and flexibility, which might be temporary—and invoked in similar situations in the future—or be permanent. ANN KOSSACHEV, DIRECTOR OF REGULATORY AFFAIRS AT NAFCU