WASHINGTON - Seven years after the horrific terrorist attacks of Sept. 11, 2001, the most lasting fallout for most credit unions is dealing with the paperwork related to cash transaction and suspicious activity reports.
But for a group of credit unions inside government facilities or that serve sponsors or areas that could be terrorist targets, 9/11 has changed their strategies for growth, impacted convenience and members' ability to visit branches, and put limits on who can join the credit union. In many cases, the primary reason doesn't require a security scanner to see it: heightened security procedures has limited access to the buildings in which the credit unions operate.
The $174-million Department of Commerce FCU here, for instance, has made home banking its most "important member portal" after security at its two locations inside government buildings severely tightened, explained President and CEO Evan Clark.
"Whenever members come into our branches, they sign in at security, who then calls us, and we escort them to the credit union," Clark said. "Before 9/11 they just passed through a checkpoint and walked to the credit union."
Clark said the tightened security forced the credit union, which has grown by $50 million over the last four years, to re-valuate how it conducts business. "Now we try to do much more business via the Internet," he said. "About 80% of our loans and probably half of our CDs are opened via the web."
The 80% loan figure illustrates that its 13,000 members have "obviously" changed the way they bank at the CU, Clark said, attributing a great deal of the shift to advertising. "We advertise about the convenience of Internet banking and our members are listening," he said. "We try to upgrade our home banking each year. Pretty soon members will be able to sign up online and join the credit union."
The Washington, D.C.-based Engraving and Printing FCU has three of its four locations inside federal buildings that have put similar security procedures in place, shared Kirsten Williams, CEO of the $44-million EPFCU.
"We have X-ray machines when members come through our buildings' entrances. We have police on all posts. And they check bags and purses going out," Williams said.
While members do not have to be escorted to the credit union, Williams said the extra time at security posts has the credit union emphasizing shared branching and home banking. "We've seen an increase in our home banking as a result, which is a good thing," said Williams, who explained that growth at the credit union has been "stagnant" due to a restricted field of membership. "In that respect, 9/11 has not impacted our growth one way or another."
In New York City, growth was not the concern raised by Municipal CU following the World Trade Center collapse. The $1.4-billion MCU invested in a sophisticated real-time data processing redundancy system that would have the credit union back online in two hours after a major incident, CEO Kam Wong (CU Journal, Sept. 3, 2008).
That same event prompted MCU, which is located just blocks from Ground Zero in Manhattan, to lease office space in an outer New York City borough to accommodate 85 "key" employees if Municipal lost its headquarters during a disaster.
"When 9/11 occurred we couldn't find office space quickly," said Wong. "So now we are paying for 10,000 square feet of office space that has desks, computers, etc. Right now that space is sitting idle, but we need to have it-Sept. 11 has made that a necessity."
The $2.7-billion United Nations FCU didn't waste much time after 9/11, creating a stronger business continuity plan, explained John Lewis, SVP of corporate affairs and general counsel for the Long Island City, N.Y.-based UNFCU.
"We are continuing to increase the robustness of that plan as we go forward and technology advances," said Lewis. "We have a hot site located away from the UN and away from our headquarters."
Lewis acknowledged that the World Trade Center tragedy and the fact that the UN is deemed a terrorist target has "certainly changed the way we operate as a credit union. Before the Trade Center incident we were working on a long-term facilities plan. We really didn't know what that was going to look like at the time, but certainly after the events of 9/11 our facilities plan changed in that we decided it was important that we had a decentralized offsite facility (for operations and executive offices) away from the UN compound. The UN being a target was not the determining factor on the move, but it certainly influenced our decision."
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The Big Apple's Big Price Tag: In Security, Media Costs & Much More(c) 2008 The Credit Union Journal and SourceMedia, Inc. All Rights Reserved.http://www.cujournal.com/ http://www.sourcemedia.com/
