CUNA News Now: Louisiana league CEO updates CUs on hurricane status

Get Headlines via Email

BATON ROUGE, La. (10/14/05)—Louisiana Credit Union League President Anne Cochran updated Baton Rouge credit unions Wednesday night on the status of credit unions affected by the hurricanes that hit New Orleans and the Gulf Coast in August and September during a Baton Rouge chapter meeting.

Water in the kitchen of Marc Ehrhardt, consultant with the Louisiana Credit Union League, reached up past the cabinets during the flooding after Hurricane Katrina. Ehrhardt figured the battery-operated clock on the wall stopped at 9:15 p.m. Tuesday night when the water reached the clock. View the slideshow for more images. (Photo provided by CUNA)

The league is still operating from a branch of Bayou FCU in Baton Rouge after flooding damaged its building in the Harahan near New Orleans. "We're doing fine, and we will go back to Harahan once we're cleared to do so," she told the 60 credit union executives attending. The building's structure is sound but it has roof damage, mold and mold in the air conditioning units. CUNA Mutual Group owns the building.

The credit unions based in Jefferson Parish are back in operation, although some of them have needs. Some are operating from the second floor of their buildings. "Yes, there's a stench, there's rubble, torn down sheet rock, but there's also attitude and spirit" to get back to operating smoothly for their members, Cochran told the group.

New Orleans and St. Bernard Parish credit unions will have it harder. "Some of the area looks like a dead zone. It's gut-wrenching to go through areas such as Lake View. Everything is covered with a gray decay, like volcanic ash, as if someone had waived a death wand across the area. It's very sombering," she said. Returning to the Ninth Ward will take some time.

The crisis has bolstered the value of shared branching. "Since Katrina, we've brought 19 credit unions under shared branching, serving an additional 400,000 members." Different credit unions, such as Southwest Corporate FCU, GTE FCU, Navy FCU and Unitus Community CU, have financially sponsored smaller credit unions for shared branching for one year. Louisiana shared-branching network, CU Cooperative Branching, has waived up front costs.

The league has disbursed to more than 600 credit union employees more than $320,000 from the National Credit Union Foundation, and the Florida and Texas Credit Union Foundations. Mid-States Corporate has donated funds directly to The New Orleans Fireman's FCU employees and Michigan is sending funds also to enable the league to disburse another $1,500 to each employee.

There will be field-of-membership issues for credit unions whose members have scattered across the country. There is uncertainty about how many members will return to the area and what they'll be returning to—especially in terms of jobs and housing.

On the lending front, credit union lending stopped momentarily in some cases, a few weeks in others, and this will impact their budgets. Many have waived fees for members.

"Credit union members' delinquencies will increase. With people dispersed in shelters, collection efforts are almost next to impossible," she told the credit union executives. "There's the issue of collateral and whether credit unions will be able to repossess collateral in delinquencies. If you drive through New Orleans, there are stacks of abandoned cars, and yachts and boats overturned on shore."

Cochran said the league was working with the Credit Union National Association (CUNA) and regulatory agencies to get regulatory relief measures extended for a longer time. CUNA President Dan Mica and JoAnn Johnson, board chairman of the National Credit Union Administration, will be in the area soon to meet with the league and see the extent of the damage first-hand.

The league has worked on getting its educational programs back up and running, and has rescheduled its training sessions.

With the generosity of the whole Credit Union System, CUNA, and the outpouring from our colleagues, "every day brings a little more brightness." However, said Cochran, "our greatest fear is that another disaster will occur" and people will forget about the support that will still be needed for Louisiana's credit unions in the long-term.

More CU/System