Credit unions concerned Mainers are withdrawing too much cash - Press Herald

Maine credit unions sought to reassure customers Friday that their money is safe in financial institutions after seeing an uptick in people withdrawing large amounts of cash from their accounts.

Many of Maine’s credit unions say cash withdrawals by their members are up. The financial institutions said they don’t have numbers yet to back up anecdotal reports of increased withdrawals, but they are discouraging the practice.

Jen Burke, spokeswoman for the Maine Credit Union League, said some of the state’s credit unions are reporting the increase in cash withdrawals during regular conference calls among the institutions discussing the coronavirus pandemic. The increased withdrawals have coincided with the pandemic’s spread, she said.

“There’s definitely been an uptick in people taking out money,” Burke said. “I don’t want to suggest that people are draining their accounts entirely, but there’s definitely been more money going out. We recognize there’s a lot of fear out there and are trying to encourage people to keep their money where it is.”

Unlike credit unions, Maine banks said they have not seen an increase in the amounts or frequency of withdrawals from their branches.

Cash is safer in a bank or a credit union than in a customer’s pocket, said Jason Lindstrom, president and chief executive officer of Evergreen Credit Union. He said bank and credit union accounts are federally insured, and online banking that credit unions provide offers secure ways to pay most bills and handle other financial transactions.

Lindstrom said he couldn’t explain the increase in cash withdrawals beyond a general uncertainty over the economy caused by the pandemic. Banks and credit unions offer essential services, he said, and, along with grocery stores and pharmacies are usually allowed to stay open even when government officials order many other businesses to close to prevent the spread of the virus.

However, banks and credit unions in the state are operating only via drive-thru lanes to maintain a separation between employees and customers. Many lobbies are closed or available by appointment only, and many bank employees are working from home, Burke and Lindstrom said.

Burke said the credit unions haven’t seen any drop in deposits, although she said that’s possible in upcoming weeks, with unemployment expected to rise following the closure of many bars and restaurants due to government-imposed restrictions.

Lindstrom said the withdrawals are curious, as many stores and most restaurants are closed because of the pandemic, so there are fewer places for consumers to spend, especially with cash.

“There’s still a cash community out there” that operates using primarily paper money, he said, but most people use debit and credit cards or pay bills online. That’s a safer way to operate, he said, because a large amount of cash kept in someone’s home could get stolen or destroyed in a fire.

There’s little likelihood that financial institutions will be ordered to close in coming weeks, Lindstrom said, so people don’t need to hoard cash.

“We need to just get back to business as normal,” he said.

More than 700,000 Mainers are members of credit unions, which are nonprofit organizations. Most credit unions begin through affiliations among members, such as a shared employer, association or industry. The Credit Union League said Maine has 55 credit unions, which have more than $8.2 billion in total assets.

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