Many ASI FCU Members Still Haven't Returned, But 5,000 Have Repaid Funds

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The sun is shining in The Big Easy, and while it is as likely to be dappling the rusted hulks of abandoned cars and destroyed homes as it is to be reflecting off an unscathed building in the French Quarter, at least it is shining.

Now, if only the people-in particular, credit union members-would return to see it.

"We haven't seen our members return, but at least we know where they are," said Audrey Cerise, CEO of ASI FCU.

To understand the magnitude of that statement, "at least we know where they are," take a trip down memory lane with Cerise. When The Credit Union Journal caught up with her just days after levees were breached by the flood waters, Cerise bemoaned, "you know all those people you see at the Superdome shooting at their rescuers? Those are our members."

And those members have long since been shuttled out of New Orleans to points all across the nation.

"We have a lot of members in Texas and Georgia, some in Florida, but they're really scattered all over the place. They've gone to wherever they had friends or family who would take them in," Cerise explained. "We sent out surveys to all our membership, asking them, are you out of work? Are you having trouble meeting your obligations? How can we help? But for a long time we didn't get any back."

Then one day, the Post Office brought in a stack of more than 600 of them all at once.

That's when the credit union realized that members were, in fact, receiving and sending back the surveys, it's just that those surveys were taking a rather circuitous route to get back to ASI.

"They did start telling us where they were, and when we asked them how we could help, so many of them said, 'I could use a job.' Others said they needed a place to live. We had people asking us, 'can you help me find my mom?' It's heartbreaking, because they need so much help in so many ways on so many levels, and there is only so much we can do for them."

ASI started out life as a credit union serving the employees of Avondale Shipyards but has since added seven low-income communities and 300 SEGs.

"Many of our members are moderate- to low-income. A whole bunch of them are in the service industry," she related. "That means a lot of them didn't own their own homes, they were renting. The thing about that is, if you owned a home, even if it's still destroyed, at least you have a lot where you can put a trailer. If you were renting, there's no place for a trailer."

For as massive of a feat as it was just to find ASI's members, that is only half of the battle.

"We had 10,000 people who overdrew their accounts. So, far, 5,000 have paid it back," Cerise commented. "We're going to take a big hit, we just haven't taken it yet."

The reason: ASI continued to let its members withdraw money from their accounts at various ATMs, even though there was no way to balance any of those transactions for days.

"When we do find them, they say, 'do what you have to do, but I can't pay you,'" she offered. "They're not trying to be mean, they're just telling it like it is. These people don't know how they're going to feed their children, paying us back is the last thing on their minds. It's not that they don't want to pay us back, but they honestly just can't, and there's no telling when or if they ever will."

For as big of a hit as ASI knows it is going to take, it also knows it is going to survive-with help from the one place the credit union had initially been afraid would be its downfall.

"NCUA has been absolutely wonderful," Cerise told The Credit Union Journal-a complete 180-degree turn from nearly six months ago, when Cerise was concerned that what would be the eventual downfall of the credit union was impatience and inflexibility at NCUA. "Did we have to make cuts and make some tough decisions to show them we could be profitable? Yes. And we did that in November, in December, in January. We're going to take a hit, but it's not going to put us out of business. My team put together such a good program that we were able to show NCUA that we could do it if they worked with us, and they have worked with us. They have been truly wonderful."

The credit union reported $300-million in assets as of January of this year, up from $250 million in its September, 2005 call report.

75,000 Folks Who Did The Right Thing

When Cerise talked with The Credit Union Journal in those first frightening days, the CEO felt shocked and betrayed by the members who had overdrawn their accounts by thousands of dollars. But time has brought perspective.

"Yes, then I was saying, 'after all we've done to try to help these people, and this is how they repay us?' " Cerise recalled. "But now we can say, hey, we have 80,000 members. Five thousand took money from us and didn't give it back, but you know, 75,000 didn't. And we know there are a lot of people out there who are very willing to pay us back, but they can't feed their families, much less pay us. It's taken a while to get there, but now it doesn't seem quite so bad."

And ASI is just as dedicated as it was before the storm to try to reach out to low-income people. The credit union recently was certified as a Community Development Financial Institution, and it has formed a non-profit called A Shared Initiative to help finance low-income housing.

"The CDFI makes us eligible for housing grants to get housing built in places like the 9th Ward that was just devastated," Cerise noted. "What New Orleans needs most is housing and people trained in construction," she observed. "Housing, and qualified people. There are a lot of people out of work, and there's a lot of work to be had-but they have no place to live."

As a result, credit unions in New Orleans and all along the Gulf Coast will need to adopt a new mindset, Cerise suggested. "We're going to have to think about lending in a different way, because the fact of the matter is, no one out here has perfect credit any more."

Given the opportunity, Cerise said she had a few words for credit unions in the rest of the nation. "Most folks in the rest of the nation have been so supportive. They would call and say, 'what do you need, how can we help," she related. "So I would like to just say thanks. When we needed it, they stepped forward. So, thank you."

And while it will still be a long time before it is really clear how New Orleans will come out of all of this, Cerise is positive about ASI's future.

"Things turned out a whole lot better financially that I thought it would," she said. "The sun is shining-on blue-tarped roofs-but the sun is shining."

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