Confronting A New Reality: What If Members Stay Away?

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One of the potential long-term ramifications of the devastation wrought by Hurricane Katrina is only now starting to rear its ugly head: a mass migration by credit union members, many of whom may never return.

"The biggest challenge of all at this point, and I don't think this is just for our credit union, is something at the very heart of the livelihood of our organization-the loss of members," said Mia Perez, director of marketing and business development at Greater New Orleans FCU. "We have an entire city under water, homes are gone. We can rebuild branches, we can replace systems, but without members, there is no credit union. We may be up and running, but if our members who have had to seek their livelihood elsewhere don't come back, that's going to be the challenge."

And for $82-million GNO, that is a very real worst-case scenario, given its field of membership. "We serve Orleans Parish, which includes the city proper. In fact, we have an underserved membership in New Orleans," Perez pointed out. Many of those underserved people are the very people who went to the Superdome, and then to the AstroDome, and from there, it's hard to say where they will land. "You're talking about half a million people-gone," Perez said. "And some will never return."

Moreover, members who have been displaced all across the country, even if they plan to return to New Orleans some day, are already telling the credit union they intend to move their accounts to a bank. "I've had members say to me that as soon as they've got some semblance of normalcy back, they are going to move their accounts to a bank that has national access," she related.

And even though GNO is part of the shared service centers network and therefore does have access beyond its local branches in the New Orleans area, some members believe that they would have a much easier time accessing their accounts if they moved their business to a bank such as Bank of America, that has branches in almost every corner of the U.S.

It's a long-range problem that is downright scary, Perez noted, but right now, credit unions in the battered Gulf Coast region have short-range challenges to overcome first. "We don't have a lot of ways to let members know where we are and where they can get service, because it's not like we can advertise right now," Perez told The Credit Union Journal, noting she was preparing to hike out to the interstate and erect signs alerting people to the CU's location.

Communications continues to be a major problem in the regions-indeed, Perez said there are still GNO staffers it hasn't reached-but are quickly resuming in most areas and continue to get better every day.

Hurting For Housing

Finding housing, however, is a whole other story.

"We have 129 credit union employees whose homes were either totally destroyed or will be uninhabitable for an indefinite period," said Charles Elliott, president of the Mississippi Credit Union Association. "I would say that communications is still the biggest issue, but employee housing is going to be tougher for a whole lot longer."

MCUA is in touch with Federal Emergency Management Agency and is hoping to get an allocation of mobile homes from the federal disaster agency, "but I'm not sure how lucky we will be," he added. "I know we are frustrated, and credit unions across the country who want to help us are frustrated, because it seems like no matter how much they want to help, they can't really give us what we need when we need it. There's been an outpouring of help from credit unions all around the nation, and we are thankful. The problem is, they call and ask what we need. By the time we tell them what we need, and they've loaded up a truck and driven it down here, the need has changed."

Take, for example, six satellite phones. By the time they were delivered, the users had had their cellphone service restored.

"You want to know what we really need? What we really need is 100 mobile homes," he said. "See, that's the problem. We don't need the little stuff. We need the big stuff, and the big stuff is a whole lot harder to come by. We've got 129 people without homes-and those 129 people have families. We've got one woman-plus her husband and infant-who is currently staying in a small house with three other families. Not three other people-three other families. We've gotten some motor homes and campers for employees, but we need more."

Some of the campers needed are for credit union operations.

MCUA has distributed $500 in emergency cash to about 200 employees and is also working to match people up with others who can provide them with some of their other needs. The situation is similar elsewhere.

"Seven of our nine employees are working, six from here, one remotely. A couple of our employees have lost everything," said Chris Maurer, CEO of the $20-million, 4,000-member UNO FCU.

"Here" refers to Campus FCU in Baton Rouge, La., which has given office space out of which UNO is currently operating. "All of our employees evacuated ahead of the storm, and none of us are back in our own homes at this point. Two of them might be back in their homes by the weekend. But three of them had water flooded up to the roof. One of our biggest challenges right now is basically getting staff to be able to work a full day. Some of them have a two-and-a-half-hour commute to get here. People just can't work under these conditions. We have one employee who is living in a hotel. They've got two rooms for 10 family members."

Maurer was hoping to get special permission to go inspect UNO's facility in New Orleans-if he could get away from the temporary office for a while.

"If I could have just one thing, it would be a person from another credit union who knows my DP system (Symitar's Cruise product) inside and out who would volunteer to come down here who could take over that aspect of running the credit union so I could get to other things," he said. "Right now, I'm the only one who knows the system well enough, and I can't take the time to train someone else. But I also can't get to anything else, and it's frustrating. Even if I get permission to go to our office, I'm just not sure I can get away. I haven't been able to take care of any personal business, either."

And if Maurer does get to the CU's old office, he's afraid of what he will find.

"We have already been told that the building was definitely vandalized. Apparently, it's been totally trashed," he related. "Hopefully, they were just looking for food and stuff, but we had member data all over the place, so we're very concerned about identity theft."

That branch is UNO's only branch, and Maurer said he doesn't anticipate being able to operate from there until January. When asked if he will just continue to work out of Campus FCU or seek other temporary offices, he replied, "I haven't even thought of that, yet. Campus FCU extended us an open invitation, but I don't think anyone thought we'd be here until January. They've been very good to us, but we are in their way."

At least Post Office CU-the oldest credit union charter in Louisiana-has a home, which is more than can be said for its CEO, Sydney Parfait.

"We are operating out of one of our branches. Really, the only difference to our members is that we currently have only two locations instead of five," Parfait commented. "We are fully operational."

In the days right after the storm hit, CUs across the country were helping POCU help its members who were scattered all over the nation. "During that first week, the people in Texas, Alabama and Georgia were tracking me down by cell phone to give the verbal OK for them to give cash to our members," Parfait related. "The National Council of Postal Service Credit Unions has been wonderful. They have been reaching out to our members wherever they may be."

The credit union is working to open another branch this week and then another next week, but the main branch is another story, as the CU must wait for the U.S. Postal Service to reoccupy a building that is just a half-block from the Superdome in New Orleans. It is safe to say is the U.S. Postal Service will be back in its building before Parfait is back in a home of his own.

CEO Loses Home

"Our home was in Slidel, La., which is essentially where the hurricane came in. We lost our home," he said. "But it's all right. It's only material possessions. We did go back in one day, and we were able to save some beach towels and one TV. That's it. Everything else is gone. I took photos right before the storm hit, and I took photos after. It's just a sickening feeling to look at them.

"But like I said, it's just material possessions, and I can replace those. There were some sentimental things that we lost, the pictures of our children and grandchildren, photos of my parents, but a hurricane can't take the memories away, and we still have those."

Parfait and his wife, who is the branch manager of what has temporarily become the main branch for Post Office CU, are living in the home of a friend that had been used by the some relatives of the friend. "But the relatives have said they're not coming back, they just can't take it, so we'll be able to stay here for a while," he explained.

Perez, Elliott, Maurer and Parfait have similar stories of destruction to tell-but they also have similar stories of hope. "We'll get through it," Perez offered. "The city is resilient. Credit unions are resilient. There's a credit union down the street from me, ASI, and it's operating even though there are two trees that have crushed the lobby (see related story, page 1). So, they're serving their members out of the drive through. Creativity is the key, and credit unions are creative."

"It's just unbelievable the outpouring of generosity and support from credit unions," said Elliott, echoing similar sentiments from Perez, Maurer and Parfait. "It's so comforting to know that you are not alone. That is one of the biggest things we can give people right now: hope. Knowing that other credit unions are trying to help, gives us hope. We've been giving out a whole lot of hope and a whole lot of hugs around here, and you better believe that's about the biggest thing of all."

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