DEFIANCE, Ohio -
The program, launched Sept. 4, has already received strong response from both members and nonmembers in Putnam County, one of six northwest Ohio communities served by the $101-million CU.
"Most of those affected did not have flood insurance because they did not live in a designated flood plain," said Sonja Delaney, CEO of Midwest Community FCU. "The Blanchard River is such a tiny river, but you can't imagine the devastation it caused."
Evacuation of the community began Aug. 22. The river crested at 8.7 feet above flood stage on Aug. 23, saturating the community of Ottawa. Residents were allowed to return to their homes Aug. 25, many of which had been devastated by the rising waters. Of the credit union's 200 members in the Putnam County community, at least 95 families were affected by the disaster, Delaney said.
The idea for the loan program grew out of an immediate response by the credit union's employees to raise funds for the Red Cross to aid the affected families, said Colleen Griffith, the credit union's vice president of operations. Knowing other groups would be providing funds to the charity, the credit union sought a more meaningful way to contribute.
"With so many people trying to help, we knew we wanted to fill a need that currently wasn't being met," Griffith said.
That thinking led to the creation of the flood relief loan program. Loans of between $500 and $5,000 were offered to affected families at 0% interest for 90 days, adjusting to 6% on the 91st day and with a first payment due at 120 days. The loans mature at 48 months and the credit union earmarked $500,000 in funds for the program, or the maximum $5,000 amount for up to 100 borrowers, Delaney said.
Setting up a temporary office in Ottawa, credit union staff went door to door, offering relief through the loan program. Those affected by the flood who weren't members were allowed to join, with the credit union absorbing the normal $25 membership fee. According to terms offered new members, those whose loans runs beyond the 90 day time period, allowing the credit union to accumulate interest, or who stay with the credit union and use other services will have the membership fee waived. Those who pay off their loans within 90 days will be responsible for the $25 fee.
Many families lost everything, raising the need for more immediate relief than the loans could provide, Delaney said. To address that need, Midwest Community petitioned the Ohio Credit Union Foundation, part of the Ohio Credit Union League, for assistance. The foundation responded with a $10,000 grant, which the credit union converted into 100 gift cards worth $100 each, which it began distributing to affected members on Sept. 10. The credit union covered the $2.50-per-card production and administrative charge, enabling members to immediately purchase whatever provisions they might need to start their recovery.
"The people we've contacted so far have been very appreciative," said Delaney.
Superior Federal Credit Union in Lima, Ohio, and Millstream Area Credit Union in Findlay, Ohio, have also been making special provisions for flood victims in the state, supporting Delaney assertion that credit unions are usually the first and sometimes the only financial institutions to respond in times of crisis.
"We look at this as a way to fulfill the credit union philosophy of people helping people," said Delaney. "In times like this, it's only the credit unions that come to the forefront."
