New Orleans rebuilding challenges CDCUs
WASHINGTON, D.C. (5/8/06)--Two community development credit unions (CDCUs) shared the difficulties of post-Katrina rebuilding with a packed house at the national conference of the Coalition of Community Development Financial Institutions.
ASI FCU has 80,000 members, making it the second-largest CDCU in the nation. The Harahan, La.-based credit union expected to be without offices for three days when employees evacuated Aug. 26, 2005. Instead, staff were forced to work from outlying offices for weeks when four branches were destroyed and one was severely damaged.
Fifty employees never returned to work. Off-line ATM withdrawals allowed member overdraws to eventually reach $6 million, which has since shrunk to $2.8 million as members made good on the funds. Capital fell from 9% to 4.76% as members received an influx of Federal Emergency Management Agency (FEMA) and insurance funds.
Challenges have included rebuilding capital, balancing accounts and achieving drastic reductions in operating costs. Cutting costs required selling a branch, eliminating raises and bonuses, and cutting pay.
Hope Community CU, a smaller organization based in Jackson, Miss., has been affected by the damage throughout the Gulf Coast area. The credit union had just opened a branch in New Orleans when the hurricane hit.
Hope Community has met community needs by opening a new branch in Biloxi and partnering with nonprofits to enroll 3,000 new members, including many who were "unbanked." It also has offered "bridge loans" to nonprofits, waived interest on some loans and set up escrow accounts to help members deal with contractors.
The federation's Community Development Relief and Rebuilding Fund provided grants and secondary capital investments to assist credit unions in Louisiana and Mississippi with reconstruction.
More CU/System
News Now LiveWire
- Iowa Gov. Terry Branstad credited Dupaco Community CU for its role in helping an Iowa small business grow and create jobs. - 4 hours ago
- Iowa Gov. Terry Branstad visits Dupaco Community CU, notes CU's role in helping small bizzes grow & creating jobs in state. - 5 hours ago
- Gunman killed Friday in shootout w/ police outside PBC CU, West Palm Beach, Fla., I.D.'d as Christopher Brown, 18. No one hurt inside CU. - 5 hours ago
- In Wash Post article on ?end of Fannie and Freddie,? CUNA?s Hampel says CUNA, CUs are working on contingency plans. http://t.co/bzmi57mY - 6 hours ago
- John Bell, an employee of NC Community FCU, has announced his candidacy for the NC House of Representatives. - 3 days ago
- See all our Tweets and sign up; News Now LiveWire on Twitter
