Emergency Aid Poses Big CUOpportunity
HOUSTON - (09/12/05) -- A huge scrip-like emergency reliefplan was abandoned Friday, almost as fast as it appeared in thewake of Hurricane Katrina, providing vast new opportunities forcredit unions and banks. The Federal Emergency Management Agencyquickly suspended the disbursement of as many as 600,000MasterCard-branded debit cards with $2,000 stored on each one, asthe initial disbursements to 20,000 New Orleans refugees living inthe Astrodome nearly resulted in rioting. FEMA said instead it willdisburse as much as $1 billion in emergency payments throughtraditional accounts at credit unions and banks, and urged as manyas one million refugees from the Hurricane to register to receivedirect deposits from the emergency agency. The advent of the hugefederal assistance program--the largest ever for an emergency--poses potential opportunities for the financial institutions whichserve them. The stored value card program went awry almost from thestart. First, refugees living outside of Houston where the cardswere to be distributed were angry they were not being given thecards at the same time. Then the Red Cross began passing out itsown debit cards at the Astrodome, confusing many people andangering others who waited for hours in high temperatures. Policehad to be brought in for crowd control. In Houston, poor people whoheard of the government payments tried to get into the Astrodome.The cards were to have gone to allow refugees from Katrina to buyfood, clothing, shelter and other necessities.