Gulf Coast CUs Not Feeling Spill Yet-But Could In An Ironic Twist

Register now

NEW ORLEANS-The ongoing oil spill has yet to have much impact on credit unions or their members along the Gulf Coast.

Leagues serving Louisiana, Alabama and Florida told Credit Union Journal that they and their member credit unions along the coast are watching the spill and even raising money to help with the clean-up efforts, but have not reported any significant problems to date, in part because many members who have been affected are receiving compensation from British Petroleum.

In an ironic twist, however, concern is growing that the moratorium on deep sea drilling currently entangled in the courts will have negative consequences if it remains in place.

Mignhon Tourné, President of ASI FCU here, has heard "just trickles" of information and concern from members, most of whom are worried about the medium and long-term impact of the leak on the critical oil and natural gas operations in the Gulf.

Tourné said the region would see a negative impact if the moratorium is not lifted, as both members and secondary businesses are "dependent on the [oil and gas] industry to keep the economic engine moving."

Meanwhile, some analysts have expressed worries over the potential impact on property values. American Banker, an affiliate to Credit Union Journal, reported that financial management teams across the Gulf region have been hammered with questions about how severely their real estate books may suffer and how much capital they may have to set aside to cover bad loans as a result of the spill.

For reprint and licensing requests for this article, click here.