I am the Chief Risk Officer of a multiplatform lender. We are in 48
states. Over the last few weeks, I have been tasked with setting up an
infrastructure to handle the impact of the coronavirus on our company. I am
also concerned about our non-online loan officers who have continual face-to-face
contact with the public. I read your announcement about getting prepared for the
pandemic, which was very informative. However, because we are such a large
company, I am challenged in finding a means to go beyond mere training. What
else can I do to inform our employees of the actions they should take to
protect themselves from the coronavirus?
ANSWER
I appreciate your concern. The coronavirus is no hoax. It is deadly. As
I write, China is currently reporting that there are patients who recovered
from the coronavirus, tested negative, and were released from medical care into
the general population, only to again test positive for the coronavirus, with additional
complications developing, such as pneumonia. Currently, the US government has
embargoed sharing sufficient, vital, and lifesaving information (i.e., the size
and results of tests) – and, what’s worse, there are not enough test kits.
We published the announcement, entitled Coronavirus: CDC Guidance - An Urgent Message. I urge everyone to go there and read it! You can
print it out, too. The announcement is devoted to the impact of this pandemic
on businesses. It has received a huge response. But time will
tell if companies take the actions needed to protect themselves!
The US is on the threshold of the first wave of the pandemic. There
will be considerable mortality and sickness. Over the next few months, the
mortality and morbidity will crest at awful levels, but perhaps nothing like
the impact of the second wave, which will commence in Fall and Winter. It is
the second wave of such a pandemic that usually is many times more severe than
the first wave. Unprepared institutions will incur all manner of risks, adverse
knowns and unknowns, and financial setbacks. Now is the time for management to
act soberly, calmly, confidently, and deliberately.
During these difficult times, it is important for management to set
standards to diffuse the panicking alarmists and people with political agendas who
would prey on our fears or dismiss the severity of this worldwide pandemic. The
coronavirus is not political. Pay attention to medical professionals and
scientists. Politicians who have no medical expertise or think science is a
joke or have no expertise specific to the epidemiological conditions and
symptoms of the coronavirus are in no position to offer medical or scientific
guidance. Ignore them! This virus is not SARS, it’s not MERS, and it’s not
influenza. It is a unique virus with unique characteristics. You should conduct
an online search of scientific and medical organizations to compile sufficient
information to draft and disseminate a policy document for your employees.
Containment is possible, but it must be implemented immediately!
Here are some actions to consider:
Management: The Senior Management and Board of Directors should meet
and draft a statement that recognizes the potential impact of the pandemic on
the financial institution and sets forth a directive to put in place various
strategies to identify and reduce risk.
Manual: Develop a manual that is provided to employees, containing the
outline of your response plan. Obtain a written attestation from employees that
they have received and read the manual.
Human Resources: Ensure that HR is fully engaged in handling sick leave
and other remedial measures. Be sure that HR has researched and proactively
prepared for ADA requirements.
Links: Disseminate links to medical and scientific organizations, such
as -
-Interim Guidance for Businesses and Employers to Plan and Respond to Coronavirus Disease 2019 (COVID-19), February 2020
Hotline: Provide a hotline that has a distribution list to Compliance,
HR, Legal, and Management.
Committee: Establish a Health Management Committee that is tasked with
keeping the company current on the COVID-19 pandemic, its effects, its impact,
and the actions needed to contain it. Give the Committee authority to take affirmative
actions on behalf of the company.
Disaster Recovery and Business Continuity Plan (DRBC): Draft and ratify
a DRBC as soon as possible and continually update the Business Continuity
section per the changing demands of the pandemic.
Training: Use medical and scientific personnel to assist in training
employees on the ways and means to contain the pandemic. Training should be
done online.
Meetings and Travel: Cancel group meetings, conferences, and
conventions. Cancel all unnecessary travel where flying is being discouraged by
health notices. Group meetings and certain kinds of travel are vectors for spreading
coronavirus.
Weekly Online Update: Offer employees a weekly online update, where
employees can receive current information about critical news involving the pandemic
as well as how to engage with the public, such as in taking face-to-face
applications.
Management Message: Management should not sugar-coat the implications
of the coronavirus or play politics. Any equivocating will be viewed as
disingenuous and could provoke panic. Keep it real! The company may become
seriously exposed to a reduction in workforce and revenues. Management should
issue periodic statements about what it is doing to mitigate the risks, encourage
its employees, and do what it can to support the community it serves.
Jonathan Foxx, Ph.D., MBA
Chairman & Managing Director
Lenders Compliance Group
