Australian wildfires have credit unions Down Under in recovery mode

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Australian credit unions are scrambling to deal with the ongoing impact of the wildfires ravaging the island nation. The fires have resulted in closures and credit union professionals from across the country putting together programs to assist those in need – including their colleagues.

Ignited by an intensifying drought, fires broke out in late December 2019, which is considered an early start to fire season since it's just the first month of summer in Australia. Summer on the continent began on Dec. 1, 2019 and concludes Feb. 29, 2020.

Damages from the blazes are expected to exceed $100 billion, according to AccuWeather. At least 25 people have died in the fires to date.

A New South Wales (NSW) Rural Fire Service volunteer watches a fire in bushland during back-burning operations in bushland near the town of Kulnura, New South Wales, Australia, on Thursday, Dec. 12, 2019.
A New South Wales (NSW) Rural Fire Service volunteer watches a fire in bushland during back-burning operations in bushland near the town of Kulnura, New South Wales, Australia, on Thursday, Dec. 12, 2019.

Credit unions across Australia have had to adjust operations as a result of the fires. Horizon Credit Union of Australia has a footprint spanning about 500 kilometers, of which nearly half – roughly 155 miles – has been impacted. The CU holds approximately $400 million in assets, serves about 15,000 members and has 60 employees.

“There’s no doubt, it was terrifying,” said Horizon CEO Jon Stanfield, noting that all major highways and roads were completely shut down so there was no way for CU staff to reach other branch locations. In fact, the credit union was unable to contact its main branch for two days because a main cellular tower was temporarily down, so “for about two days I didn’t know if the rest of our staff was safe at all.”

None of Horizon’s branches have been damaged, but much of management’s concerns are focused on how staff have been affected. Some employees live as far as 60 minutes away from a branch, which would mean that employees would have to battle blazes just to get to and from work.

“A lot of staff are very traumatized as a result of what has happened,” said Stanfield. “These fires can just move so quickly that you can’t outrun them."

Of Horizon’s nine branches, six locations temporarily shut down because of staffing concerns. The first location closed on Dec. 30 at the start of the fires, though all locations are back up and running for now.

Horizon is far from the only credit union or financial institution Down Under to face these challenges. According to Sally Mackenzie, director of strategy and stakeholders at Australia’s Customer Owned Banking Association, when branch closures have happened they have generally lasted for a few days at most or even just a reduction in operating hours. She estimated that about eight CUs there have had to at least temporarily close one branch or more as a result of power outages or smoke hazards. Some credit union professionals there, she said, have lost their homes and have been sleeping in cars or on the beach.

COBA serves over four million members and is owned by 64 member institutions, including 37 credit unions. COBA has worked alongside the Australian Security and Investment Commission, one of two main regulators impacted credit unions can turn to for assistance.

Not out of the woods yet

According to Stanfield, Horizon Credit Union is providing staff access to counselors for those “who have been traumatized to help advise them and get them back into routine as soon as they’re able to do so.”

All of the credit union’s staff are safe, but that doesn’t mean that the CU is in the clear just yet.

“We’re not even halfway through summer yet — we talk about February being the most dangerous bushfire month,” Stanfield said.

Horizon’s branch in Bermagui — on Australia's southeast coast — was closed for about nine days, primarily because the whole town had no power and was “pretty much evacuated,” Stanfield said. The 2016 Census estimates that Bermagui's population is 1,536 people, a relatively small town compared to larger cities in Australia such as Sydney and Melbourne, which it sits between and which both boast populations in the millions. The small town experienced a rush for cash when electrical networks went down, which impacted the ATMs. As a last resort, the town’s residents began bartering with one another, swapping meat for eggs and other goods in lieu of cash, Stanfield reported.

As with natural disaster in the United States, many Australian CUs are putting the emphasis on self-service and digital channels. More than 27,000 ATM terminals can be accessed across the continent said Mackenzie.

Though most ATM networks have been restored, credit union members in Australia have experienced more dramatic losses. At Horizon, at least 50 members have lost their homes to the bushfires so far. That could ultimately impact the credit union’s loan portfolio, but for now, said Stanfield, staff are focused on making things easier for members where they can.

“The simplest thing to do is sustain their repayments on the loans involved in those cases,” Stanfield said, adding that CU officials are working to defer loan payments, help members file insurance claims, and promoting public health and temporary acomodation services from the government when appropriate.

A Horizon Credit Union employee brought a rescued joey (baby kangaroo) to the branch after the wildfires
A Horizon Credit Union employee brought a rescued joey (baby kangaroo) to the branch after the wildfires

It hasn’t just been members impacted, either. Australian wildlife has also suffered greatly. Horizon employee Felicity Mott is a volunteer with the nation’s wildlife rescue society, and three joeys, or baby kangaroos, were in her care when the fires hit. When her own property was evacuated, she brought them along to work.

How to help

In keeping with the movement’s “people helping people” ethos, American credit unions have long pitched in when natural disasters hit, whether in the wake of Hurricane Katrina, wildfires in California, a series of natural disasters in Puerto Rico and more.

With the blazes ongoing, CUs down under are still assessing new damage each day, so monetary assistance is crucial. Celebrities like James Packer, Elton John and Kylie Jenner have all pledged to chip in, and Credit Union of Australia has committed $150,000 to assist in the recovery on top of another $50,000 donation to the Australian Red Cross.

“Hundreds of thousands of dollars have been raised so the [credit union] sector has really shown its generosity,” Mackenzie said.

With so much of the nation’s economy centered on tourism, Stanfield suggested those who can afford to could also help by taking a trip Down Under.

“The other thing that we’ll be doing over the coming months is promoting the message strongly to all our communities that the affected areas are ‘open for business,’” he said, adding that “while short term assistance is very important, it is also critical that these towns recover economically. The best way that many domestic and international travelers can support the region is to come visit these beautiful towns and beaches.”

But there are other ways credit unions can help too. Mike Reuter, executive director of the Worldwide Foundation for Credit Unions, reminded that when the California wildfires flared up a few years ago, a number of U.S. CUs banded together with community partners and local government and media in order to create a communication hub. Having a strong channel like that, he said, allowed information relating to financial services, additional humanitarian aid and other miscellaneous support to be dispatched in a way that both citizens and members could utilize.

When credit unions face hard times inflicted by disasters, domestically they can lean on their state leagues and internationally, look toward national associations Reuter added. In Australia’s case, the Australian Mutual Foundation is an industry association for the continent’s credit unions, and is available for assistance. What that assistance will look like, however, remains unknown

“It will come down to once the fires are put out,” Reuter said. “What it’s going to come down to is what our peers in Australia uncover in the wake of the bushfires.”

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Disaster recovery Disaster planning Natural disasters Australia