8-Step Plan for Handling a PR Crisis & the Role of Legal
Sarah Snell Cooke, CEO, Cooke Consulting Solutions
Henry Meier, Esq., The Law Office of Henry C. Meier, Esq.
We’ve seen quite a few headlines involving credit union crises lately:
Citadel became the first-ever credit union to pay out a settlement with the DoJ for redlining - $6M
VyStar is facing legal action and a $1.5M settlement with CFPB for its botched mobile banking rollout
Initial stories went on for a month+ around May 2022
Class action suit filed in June 2022
Quiet for 2 years, and then BAM – CFPB fine
Navy Federal was ordered to pay more than $95M: $80M in refunds and $15M in civil penalties by the CFPB
Crises are inevitable, so how should you handle your company’s public relations when ‘stuff’ hits the fan?
Let’s back up first: Your credit union or company should consistently do public relations work. Hold a press conference about a significant new partnership. Send a press release about your new green branch. Pitch your team as experts—community publications love sources for local economic or housing articles. Ensure your community giving and volunteering are documented on your social media and website. Even invite the press to shoot a video and do a quick on-site interview.
In other words, the best defense is a good offense.
If you already have an excellent reputation and relationship with the media, they’re more likely to give your organization grace and a balanced opportunity to share your side of the story.
Your Crisis PR Plan
When a story could or has harmed your company, how you respond will help mitigate the fallout to your organization’s image and business.
Create a Crisis Communications Policy. You can download a Crisis Communications Policy template by filling out the information at right. —>>>
Establish a designated Crisis Response Team (CRT). NOW. Before anything happens. This team should consist of the CEO, head of PR or marketing, legal counsel and, if needed, a subject matter expert. You will consult others, but keep this team as small as possible. Also, all your top executives should have regular media training, ideally twice a year.
A PR incident management team has a designated leader, which should be your marketing/PR person. This person should also serve as the spokesperson, depending on the level of the crisis. Two schools of thought exist on who your spokesperson should be:
One is that the organization heads never serve as spokespersons. Because of their lack of expertise and the chance to distance the organization from the crisis, many companies in crisis choose to bring in an outside expert.
The other school of thought on your spokesperson is that the spokesperson should be a high-level person in the particular area responsible for the problem who is articulate and trained in speaking with the press.
When a crisis happens, gather the CRT and the SME and attorney who will consult to research the issue and ensure all your facts are in order to draft:
Internal communications to your board and separately to the staff
How you’ll explain to your regulators and others with oversight
What you’ll say to your members
A statement for the media and a press release
Talking points and sound bites
BE HONEST
Include preemptive and responsive PR in your plan:
Preemptive: If you have time to get ahead of the story, post blogs and social media and issue press releases that shine a more positive light on the organization ahead of time in the same topic area as the potential problem.
Responsive: On the platforms you own, and as quickly as possible, post a statement on your website and include it in your social media and newsletters. Issue a press release or statement. Respond to press inquiries on time for the deadline, and for the love of everything, NEVER SAY, ‘No comment.’ (See No. 7)
When responding to a media request for an interview, record it to help ensure the subsequent reporting is accurate. If you don’t know the answer to a question, say you’ll need to get back to them and ask their deadline. Meet it.
Never say, “No comment.” Journalists are naturally and by training skeptical. Saying “No comment” sends up a red flag that you’re hiding something.
Be ready to debrief by discussing what went well, what improvements could be made and updates to your Crisis Communications Policy.
The Crisis Role for Your Credit Union’s Legal Eagle
So, where does a lawyer fit into the crisis response?
Most importantly, the communications strategy must be coordinated with the credit union’s legal posture. As attorney Richard S. Levick and PR professional Larry Smith explain in their book Stop the Presses: The Crisis and Litigation PR Desk Reference, “The media strategy must be fully coordinated with the legal strategy. The company cannot say one thing to the regulators in camera (in private) and something different to The Wall Street Journal in public.”
As important as an effective communications strategy is, every credit union experiencing a crisis must balance the value of keeping members informed of significant developments against the risk that too much communication might expose the credit union to increased liability in the courts or safety and soundness concerns from regulators.
What are the implications? There will often be tension between your PR pro and your counsel. This should be welcomed as it will give your credit union’s decision-makers an understanding of the risks and benefits of responding to a crisis.
Just as credit unions should develop a communication plan, integrating a legal adviser into your crisis team before a crisis occurs can have several advantages. Lawyers representing credit unions have an advantage over other business lawyers: We are already aware of a wide range of obligations with which credit unions must comply.
A crisis could trigger several legal requirements, ranging from notifying NCUA about a data breach to activating a disaster response plan. Consequently, just as a communicator can lay the groundwork for responding to a crisis long before it occurs, well-crafted and implemented procedures can strengthen a credit union’s legal posture in responding to a crisis before it occurs. Your credit union undoubtedly has policies and procedures stipulating it will comply with data breach notification requirements. But does the credit union understand the distinctions between federal and state notification requirements to which it is most likely subject, even if it is a federally chartered credit union? There is no such thing as being too prepared for a crisis.
Don’t minimize the importance of ensuring that your crisis response team has someone to whom it can speak frankly. Although the nature and scope of attorney-client privilege varies depending on the role played by the attorney and the nature of the information being shared, the ability to speak freely about the potential implications of a crisis can be invaluable. For instance, is there a way to investigate the root cause of a data breach while avoiding the widespread publication of the credit union’s IT response? What obligations does your board have upon being informed that its CFO of 20 years is suspected of stealing from the credit union? What comment, if any, should it have to the local television reporter in the credit union's front lobby? Good questions that can be most appropriately answered with a frank and open exchange of ideas.
Crisis mitigated if not averted entirely. Right? Hopefully, but bear in mind that public relations is not a silver bullet. It can only do so much. If your organization “grumpies” the bed, as Johnny Depp might say, it could be a long road to recovery. Ultimately, the goal is for consumers to come out of the crisis with a positive view of the organization.
Would you like to connect with Sarah and Henry about how to handle your company or credit union’s next crisis? Reach out to us at sarah@cookeconsultingsolutions.com.