Payments System Grinds To NearHalt
NEW ORLEANS - (09/05/05) -- Payments through the Gulf Coastground to near standstill last week as core processing systems atthe region's credit unions and banks were flooded or leftpowerless, ATMs were submerged under water and the clearing ofchecks was delayed by the shutdown of the transportation throughthis financial center of the south. Credit unions and banks inunaffected areas were even shutting down ATMs and other forms ofcash withdrawals because the Federal Reserve Bank of Atlanta's NewOrleans office was all but shut down by the flooding in theaftermath of Hurricane Katrina. In response, the Fed had redeployedits cash distribution and its check clearing operations to otheroffices in Dallas, Houston, Birmingham, Jacksonville and Atlantaunder a disaster recovery plan, according to Fed spokesman PierceNelson. "It is in an area that is susceptible to natural disasterand we do have contingency plans in place," Nelson told The CreditUnion Journal. While it was working to keep the electronic paymentssystem functioning, the Fed was also trying to make cash readilyavailable. All other credits, including payments and presentments,were already being delayed for two days or more. The major ATMnetworks in the area, PULSE EFT, The CO-OP Network, NYCE and ArmedForces Financial Network all went to 'stand-in'mode, which allowscardholders to access cash on ATMs even if their credit union's orbank's data systems are down. The stand-in mode was helping cardusers from New Orleans, Biloxi and other hard-hit Gulf cities toaccess their funds in remote areas, as far away a Houston and SanAntonio, said Stan Paur, head of PULSE. "We've had a huge base ofATMs and point-of-sale terminals virtually wiped out," saidPaur.