HARAHAN, La. (8/31/15)--Ten years after Hurricanes Katrina and Rita devastated New Orleans and the Gulf Coast, the nation still talks about the largest natural disaster in U.S. history. One shining light in those dark days was credit unions, who banded together to support other credit unions and thousands of members who lost their livelihoods and homes. The Louisiana Credit Union League (LCUL) marked the occasion and the lessons learned in its eNews (Aug. 28).
In the hurricanes' aftermath, Louisiana credit union employees faced personal challenges, damage to facilities and loss of key staff, but stayed determined to help their members. “While the days following Hurricane Katrina were filled with challenges and uncertainty for Louisiana credit unions and their members, credit union employees returned to work and ensured that branches were re-opened quickly to serve members,” said LCUL President/CEO Anne Cochran. The employees “implemented our philosophy of ‘people helping people’ when members needed it the most and were instrumental in the recovery and progress made in Louisiana’s credit union movement since 2005,” she added.
Most of the assistance the state’s credit unions received was from within the credit union movement, a resource other financial institutions did not have. CUNA and its state leagues mobilized for fund-raisers and donations from foundations and individual credit unions offered office space, funds and clothing.
“Credit unions are part of a cooperative movement--don’t ever take that for granted or forget that,” Judy DeLucca, CEO of New Orleans Firemen's FCU, told the league. “We had credit unions reaching out to us. At the same time we reached out to credit unions and let them set up shop on our sites that were up and running. We shared space with two credit unions five years later. Employees of credit unions in other states brought Christmas presents for our employees’ children and provided cash and clothing for our employees’ needs. I personally will never forget their generosity.”
The cooperative trust in each other also extended to members. Because credit unions were there when it counted, members came through in repaying their loans and obligations. “One lesson learned was that the movement bands together when the going gets tough,” said Mignhon Tourne, ASI FCU in Harahan, a suburb of New Orleans. “We learned that our trust in our members was not ill-placed. In spite of being let down in every conceivable way by the government, the city and the relief effort, our members repaid us. Our total Katrina losses went from $5 million to $2 million. Members called us back, payments trickled in.”
The events of 2005 also brought changes within the nationwide movement, particularly in business continuity planning, shared branching, and the formation of state-level foundations to provide disaster relief in their states.
The movement learned that shared-branching was crucial. The league connected 21 credit unions to its shared-branching services within 48 hours. Shared branching helped about 400,000 displaced credit union members access their accounts. Credit union service centers in Baton Rouge and Shreveport distributed more than $769,000 in cash to members. The success of shared-branching led credit unions to other cooperative relationships with vendors and contractors and partnerships with other credit unions.
Also, the league partnered with the National Credit Union Foundation in 2007 to create America’s first statewide disaster relief reserve fund for credit unions, the Louisiana Credit Union Foundation. Through the Louisiana Credit Union Hall of Fame, formed in 2010, credit unions contributed more than $33,000 to the state foundation, which reaches out to credit unions and offer grants for a quick turnaround.
Some credit unions have moved their offices to safer ground and take preemptive moves when a storm threatens. Others have empowered their front line staff to make decisions on a case-by-case basis when faced with displaced members seeking disaster relief.
Keeping in daily contact with members proved important, said Tourne. “If we can share one lesson with other credit unions, it would be: Don’t walk away from your credit union’s mission to serve the underserved. Live it. Breathe it. Your members need you.”