'Homeless' CU gets assistance after hurricane

NEW ORLEANS (10/19/05)--With its membership scattered hither and yon because of Hurricanes Katrina and Rita, UNO FCU in New Orleans has set up shop in Baton Rouge with an unlikely temporary partner.

UNO serves members affiliated with the University of New Orleans. Its temporary and informal partner, Campus FCU in Baton Rouge, serves the entire Louisiana State University System--which includes the University of New Orleans. It's a case of credit unions helping credit unions, say the CEOs of the two credit unions.

"Campus FCU has been very generous," Christopher Maurer, CEO of UNO, told a group of reporters on the Louisiana Credit Union League's media tour of damaged credit unions. UNO FCU lost three branches in Hurricane Katrina and the successive flooding from the city's levee break, says Maurer.

During the ordeal, many people rescued from flooded rooftops were evacuated to the drier UNO campus, where they waited to be transported elsewhere for three or four days. People foraging for money broke into the credit union. Maurer found a children's bicycle in the office, along with liquor and cigarette butts where people camped out. "We were fortunate they were interested only in cash. The documents weren't touched," he said. Would-be thieves attempted to break into the ATM and worked on the vault's hinges with a butter knife, to no avail.

Their fields of membership overlap slightly, but Campus FCU's CEO John Milazzo says his credit union isn't actively seeking UNO members. Instead, they're working together, just like their sponsors--the University of New Orleans and the Louisiana State University--are doing to get through the aftermath of the hurricanes.

Campus FCU lost a branch and had damage to two others, says Milazzo. New Orleans accounts for roughly 20% of Campus' business.

Maurer's credit union has $20 million in assets and 4,000 members; Milazzo's has $317 million in assets and 39,000 members. Both credit unions are in good shape. Maurer says UNO is 11 1/2% capitalized. Campus FCU's capital position is 11%.

Click to view larger imageUNO FCU of New Orleans is temporarily housed with Campus FCU of Baton Rouge in the wake of Hurricane Katrina. From left, Chris Maurer, CEO of UNO FCU; John Milazzo, CEO of Campus FCU; and Greg Bursavich, board chairman of Campus FCU, share a laugh during a discussion of how they've worked together. (Photo provided by CUNA)
When the hurricane struck, Maurer was at his credit union's hot site in Alabama. After the league and the National Credit Union Administration explained UNO FCU's situation to Milazzo, his credit union made room within a week for a UNO FCU staffer to set up office in the Baton Rouge office. "We gave the UNO phone access with its own exchanges, their members could call into our call center and we would service and transfer their accounts."

"You do what you got to do," Milazzo said, adding he told his examiner he would need an 18-month reprieve on regulations because "we've got our own version of Reg Flex going on here." He added that he would never put his credit union in a place where safety and soundness was endangered, but "we're doing things that are technically not on the books--because it's the right thing to do."

Both credit unions face loss of some membership. LSU will lose about 5,000 employees, in stages, and not all from New Orleans, says Milazzo. Since August, Campus FCU grew by $10 million in FEMA loans alone, and is expecting a $5 million hit.

UNO FCU is expecting to be back in its own offices at the first of the year. "The damage isn't as severe as we first anticipated; it's not flooding damage, but there's water damage from the roof leaking, and there's mold," says Maurer.

Click to view larger image Alicia Blanda, director of communications at the Louisiana Credit Union League, presents a laptop computer to Chris Maurer, CEO of UNO FCU of New Orleans. The league is facilitating a list of credit unions damaged by the hurricanes in the Gulf Coast and what their needs are for equipment. UNO is one of the credit unions to benefit from the program. The money to purchase the computer came from the National Credit Union Foundation.
He is encouraged that the university has reopened classes on the Internet, and that 6,000 of the 18,000 students enrolled in them. "Most of our students are from suburban areas," he said. "Most of the members we've talked to are going to return." However, the university, which has a staff of 3,000 full time and part-time employees, may make temporary layoffs.

The credit union also is looking into shared-branching to help serve its members scattered as far away as Texas.

Greg Bursavich, Campus FCU board chairman, says there's talk about expanding Campus' field of membership to a community charter, but "we are LSU's credit union and that's what we want to be...we want to leave the dance with those who brought us here."

Meanwhile, the two credit unions are getting along. Milazzo says he'd like to "clone Chris' staff. They're a fine credit union." He hopes that eventually the two credit unions will continue to do some things together and share information about their similar memberships and learn from each other.

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