The Second Storm

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Credit unions working to help members and employees rebuild their lives after Hurricane Charley can expect a chaotic two years or so before things "get back to normal," according to one credit union in the Miami area that went through similar trials after Hurricane Andrew in 1992.

"When I think back to just how miserable it was [in the days and months after Hurricane Andrew], and for how long it was like that...," said Greg Blount's as he voice trailed off at the recollection. The CEO of Tropical CU had lived in Miami for about six years before the Category 5 storm devastated his adopted city in 1992. "It was as much as two years before there was a sense of normalcy."

Much like Hurricane Charley, which hit the Gulf Coast of Florida and carved a diagonal swath through the center of the state earlier this month, no one was really ready for the wrath of Hurricane Andrew when it tore through southern Dade County. Blount offered practical advice and words of wisdom for the credit unions who had members and employees in Charley's path based on his experience with Andrew.

Like any credit union, Tropical had disaster plans in place and established emergency hurricane relief loans and took other such measures to help get cash into the hands of its members who desperately needed everything from major purchases such as new roofs and new cars, to bare necessities like drinking water and clothing.

"We extended payments on loans for six months, we offered a special $1,500 loan for six months with no payments and no interest, just a single payment at the end of the term," Blount related. "At their request, we would raise credit card limits. That's what we were doing as far as putting cash at their disposal. We had huge numbers of members involved and about 25% of our staff was homeless after Andrew. We made more than $1 million in hurricane loans. We wrote off less than $50,000. It was a pretty phenomenal experience. People really appreciated what we did for them, and they did what they could to pay those loans off."

But for all that, there were many dark clouds along the way. "One difficult problem was with the insurance checks," Blount recalled. "As members would get checks from the insurance companies, if there was a lien on the property-as most of us do-the checks are made out to the lien holder. There was a significant snafu with that, and we really had to work with our members so they would understand how the process works. They would get these checks and deposit them and expect to be able to draw on those monies for whatever they needed, but those checks were specifically for making repairs to their homes. Essentially, they had to be treated almost like a construction loan."

Getting construction work done is no easy task for the average person who has no construction experience. Add the psychological trauma of a hurricane and the desperation to get back into a home leveled by the storm, and things can get ugly.

"You've got, say, 10 or 20 mainline construction companies in the area that everyone's heard of and have a good reputation. Well, they get booked up immediately. They got so busy they couldn't even answer their phones," Blount explained. "So then you drop down to the next tier, and the next tier, until finally you're to a point where any guy with a truck and a chainsaw is a construction company. You do have people who swoop in, contract for a job, maybe even start the job, and then skip out."

One Way To Help

Tropical quickly realized one of the best ways it could help members was to provide them with the knowledge needed to select a construction company wisely.

"We worked with a construction consultant, someone retired from the construction industry, who could help members learn what to look for in a construction company," he commented. "We wanted to help make sure they were working with the right people and avoid the fly-by-night operations. It got to be expensive hiring these consultants, but it was worth it. On top of the loans we made, we easily absorbed expenses of more than $1 million related to all this. But our board was great. The way they saw it, the credit union had built up its capital for 70 years, and this was the time to use that capital to help members rebuild their lives."

The credit union also ramped up its car-buying services to help members whose cars were totaled during the storm, and Tropical became a resource center for just about anything related to the relief efforts. "We wanted to serve as an advice center for people. We told them how to contact FEMA, how to contact the Red Cross. We tried to be there for people," he offered. "Members really appreciated having someone they felt they could trust to help them out. I think we built tremendous goodwill among our membership."

With about a quarter of its staff left homeless in the wake of the storm's fury, if it was one thing Tropical was easily able to do was to relate to what its members were going through, Blount suggested. "There's a tremendous psychological cost, and we wanted to be sensitive to that. We knew it was going to take an extra dose of patience," he said. "With so many of our staff effected by the storm, we had people-whole families-trying to live out of a hotel room. We knew they would need exceptional latitude where time off was considered."

Even those whose homes came out unscathed by the storm felt a deep impact from it. "For staff who had not suffered damage, we made them team leaders to look out for those who had. They would try to keep an eye out for anyone who was having trouble so we could get them whatever help they needed," Blount noted. "And...we had to create flexible schedules because of the traffic."

And no matter what degree of physical damage to property a person did or didn't sustain, anyone who lived in the storm-torn Miami area took a major psychological hit, Blount said. "The psychological blow of seeing all that devastation, it's just immeasurable," he commented. "None of us were really ready when Hurricane Andrew hit. Having lived through that, we at Tropical are very sensitive to what is happening [in the areas hit by Hurricane Charley]. If sharing what we went through helps credit unions over there help their members and employees, then we want to do that. Anything to help."

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