Many Mississippi CUs, Members Just Beginning To Pick Up Pieces After Katrina

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Even two months after Hurricane Katrina, credit union officials in Mississippi report that it is still too early to assess the total damage and trauma of the storm.

On the positive side, no Mississippi credit unions have failed, although some mergers are expected, and credit union and association officials in the Magnolia State can't say enough about the amount of aid and support they received from the organizations, branches, employees and members of the credit union community.

"The generosity of the credit union community has been unbelievable," said Mississippi Credit Union Association President Charles Elliott.

Elliott told The Credit Union Journal that all Mississippi CUs were open and operating at some level of capacity. A full 75% of Mississippi's credit unions, 80 branches and main offices, were forced to close at one point or another as a result of Katrina's wind, rain and floodwaters.

Elliott said he expected to not be able to assess Katrina's full effect on the state's CUs until the second half of 2006. He noted that thousands of Mississippi residents were physically displaced by Katrina and have yet to return, which raises the immediate concern of how many of these members will, or will be able to, pay off mortgages. As of yet, no Mississippi credit unions have been forced to close its doors, but Elliott said it would be "foolish" not to expect credit unions to merge to stay in business. Elliott said many CUs are having a difficult time assessing Katrina's effect on loan portfolios as members are holding onto their cash. Many Mississippians still haven't even seen an insurance adjuster, much less received any insurance distributions that might be used to help pay for loan payments even with 30 or 90-day extensions provided by nearly all state CUs.

"People can't go much further on not making decisions and financial institutions are going to have to make a decision (due to regulators)," he said.

Many Mississippi residents are still living in tents, mobile homes or RVs parked in their driveway as they repair damage to their property. Even as power was restored in flood-stricken areas, living in an RV in the driveway keeps families out of homes leaving the only thing living inside to be mold.

"We're just in the early stages of repairing homes," Elliott said. "The full impact of Katrina is a long way away."

Elliott said state credit unions have come to the Mississippi league for "everything they need and we've encouraged that." Starting Nov. 4, the league began disbursing $371,000 from the National Credit Union Foundation Katrina fund to 144 CU employees in need. At the Mississippi Gulf Coast Chapter of Credit Unions quarterly meeting Nov. 16, Elliott said it will literally be "party time" to recognize the cooperation and determination of area CUs, staff and members and just to let off a little steam.

"We are going to survive and prevail," Elliott said.

Elliott said the hardest hit CU in Mississippi was Navigator Credit Union in Moss Point. Navigator lost its entire telephone system and core solution, and is operating from a hot site in Atlanta.

"Most of the phone system came up (Nov. 3)," said Navigator CU EVP Laurin Avara. He said the credit union lost five ATMs and four branches in Katrina, mostly due to flooding. Six branches are now running and Avara expects to reopen one branch by mid-November. Redstone Federal Credit Union in Hunstville, Ala. has sent one mobile ATM and is preparing to send a wireless ATM to Navigator, Avara said.

Avara said deposit growth in September increased by $20 million due to FEMA funds and insurance payments, and that loan volume has been relatively unchanged. He further reported that members were holding onto their cash until they figure out what to do with their lives and homes.

Avara expects to wait until the end of November to determine the exact nature of Navigator loan losses, which he expects to occur. Avara said that his members are struggling through the disaster but staying in communication with Navigator CU staff regarding their accounts and loans.

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