As Much As $5M In Help Provided In Wake Of Storm
In the days and weeks following the devastation wrought by Hurricane Katrina, credit unions from coast to coast have poured forth with all kinds of assistance, both financial and physical, for affected credit unions and members.
By some accounts the credit union movement has raised as much as $5 million in financial contributions for relief organizations such as the American Red Cross and the National CU Foundation, in addition to a multitude of other assistance, not to mention the hundreds of volunteers, tons of equipment, mobile offices, ATMs and other logistical support.
A new survey by NAFCU to be released this week indicates that 93% of all credit unions made some kind of financial contribution to hurricane relief efforts, and a third of all credit unions provided some kind of physical assistance.
"I think what this shows is that credit unions really went out of their way to help the victims of Katrina, at least monetarily," said Jeff Taylor, senior economist at NAFCU, who conducted the survey. "I think the most interesting findings were the indirect affects. Most credit unions think this is going to have some impact on loans and shares, even if its not going to have any major monetary effects."
The new survey, part of NAFCU's monthly Flash Report, indicates the credit union movement expects the financial after-effects of the massive storm to linger across the country. A third of the 160 credit union executives polled said they expect the hurricane to have some impact on loans or shares. Almost 20% of credit union executives expect the massive storm to cause a fall-off in loan demand, while 13% expect an increase. Meanwhile, 18% expect the storm will lead to a decline in share growth, already at its lowest in decades, although 6% expect some kind of increase in share growth.
The vast majority of those polled, 77%, also said they expect the storm's effect to have little impact on monetary policy, as the Federal Reserve is poised to meet again to discuss its interest rate policies.
One area expected to be impacted by Katrina, then Hurricane Rita, is disaster recovery planning. About 40% of respondents said they plan to either change or review their disaster recovery plans because of the hurricanes.
As a result of the storms, the credit union executives say they believe the credit union lobby should pursue regulatory relief more forcefully, especially when it comes to minimum capital standards, known as prompt corrective action, or PCA. PCA reform was listed as the most important goal of regulatory relief by 39% of survey respondents; 28% of respondents listed relaxation of fair lending standards; 12% said loan payment deferrals; 11% said waiver of Federal Reserve fees for wire transfers; and 11% said relief on the member business loan cap.