LaCorp provides $8 million in loans to storm-damaged CUs
LENEXA, Kan. (11/8/05)--Louisiana Corporate CU (LaCorp) has provided to date $8 million in loans to credit unions affected by Hurricanes Katrina and Rita.
Through LaCorp's special disaster line of credit, which was implemented after Katrina hit New Orleans and the Gulf Coast, credit unions are receiving recovery loans at 0% interest to help them meet liquidity needs. Here are some situations it assisted.
Two branches of Coastland FCU, New Orleans, were underwater and a third heavily damaged by looters. It remained operational after the storm, but liquidity became an issue when members withdrew savings to purchase homes outside of Louisiana or drew down their accounts to cover expenses until insurance payments materialized.
Hurricane Katrina impacted New Orleans Firemen's FCU in many ways, although the credit union has worked to keep its focus on helping members. Despite a high volume of shared branching transaction fees, the credit union has not passed these fees on to its members and it has waived interest charges on members' home equity lines of credit products. It also has waived its overdrawn account and nonsufficient funds fees.
Hurricane Rita forced McNeese FCU, Lake Charles, La., to move its operations for two weeks to Lafayette, La., which resulted in unbudgeted expenses. Because many members could not go in person to the relocated credit union, McNeese allowed members to temporarily go into limited overdraft positions. It also gave all members with loans a one-month extension on their payments. LaCorp's special disaster funding allowed the credit union to recoup the temporarily lost cash flow.
Other credit unions receiving or in the process of receiving LaCorp disaster recovery loans are St. Bernard Parish School Board Employees FCU, Willis Knighton FCU, Shreveport; Terminal CU, Metairie; German Coast FCU, Luling; and Barbers and Beauticians CU, Metairie.
"These credit unions--and the stories of their recovery--bring home the long-lasting impact of the recent hurricanes on financial institutions in the Louisiana area," said David Savoie, president/CEO of LaCorp. "By assisting these credit unions in meeting the needs of their individual members, we can make a contribution to the economic recovery of south Louisiana. These credit unions need our assistance, and through our disaster recovery loans, LaCorp is committed to helping them get back on their feet."
After the hurricane, Savoie called on credit unions from across the country to make deposits with LaCorp to help provide the liquidity needed by Louisiana's credit unions. These efforts have brought more than $12 million.
The corporate's new associate members include Aberdeen Proving Grounds FCU, Arizona FCU, Atlantic Financial FCU, Electrus FCU, Hutchinson CU, Kinecta FCU, Market USA FCU, Money One FCU, Star One CU, Tyndall CU, and CNBS, a broker dealer and registered investment advisor serving credit unions.
The Corporate Credit Union Network also provided integral assistance in making the program possible through its disaster LOC program for corporate credit unions.
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