Katrina changed worst-case scenario for future plans
WASHINGTON (8/31/06)--"Hurricane Katrina changed everyone's worst-case scenario and prompted credit unions to attain a new level of preparation for future business continuity needs during disaster."
So says Scott Earl, director of disaster relief and preparedness at the Credit Union National Association (CUNA), and vice president of league relations at the American Association of Credit Union Leagues.
"It used to be that your backup was 20 miles away, and that was fine. But today plans call for backup much farther away and there's more diversity of backup," he told News Now.
The credit union movement took to heart several lessons from last year's hurricanes. As a result CUNA's Disaster Preparedness Committee, chaired by Florida Credit Union League President Guy Hood, will finish its work on developing a disaster preparedness plan during fourth quarter.
"The hurricane season is upon us, but the plan won't be finished until the end of the year," Earl said.
During Katrina, "it was really tough to track down all the credit unions' individual branches," said Earl. An example: the Mississippi Credit Union Association didn't hear from one credit union for several days and, fearing its staff had been killed, prepared to go to the site. Instead, the staff was at a backup processor.
CUNA Mutual and the leagues are collecting data about individual branches of credit unions and what data processor they use, he said. The National Credit Union Administration may do so, too.
Within 48 hours of a disaster, CUNA Mutual will have representatives on the ground to physically confirm the credit union's status, he said.
"We're also working to see how best the corporate credit unions can help credit unions meet their cash needs in a disaster," said Earl.
In last year's disaster, credit unions learned that "Cash is king. A vast number of people needed cash," said Earl. Credit unions were challenged with finding ways to provide cash.
That realization is changing the nature of donations solicited for future crises. Not all the donations in kind collected during Katrina--such as used computers--could be used because of software issues. So solicitations will be for cash and for certain primary operations, such as loaning a mobile ATM.
Communication, including telling members how to get in touch with their credit union, was of key importance during Katrina.
Credit unions are urged to join a program that redirects their phone lines in a disaster. CUNA contracted with VoiceGard to establish CU-LOCATE (877-285-6228), a single toll-free number members throughout the U.S. can call to contact their credit union. "It has a mailbox for every credit union and is at no cost to all credit unions, affiliated and unaffiliated," he emphasized.
CUNA has taken steps to help credit unions ensure they're able to operate when a facility isn't operable. A strategic alliance with Agility offers a suite of business continuity planning services, including the delivery of a fully loaded modular unit.
The credit union pays about $250 a month for the service. If a disaster occurs, Agility deliver within 48 hours a modular credit union with all equipment needed to operate the credit union--generators, office furniture, computers, satellite hookups, said Tom Lybeck, associate product manager with CUNA's strategic services.
Shared branching helped save the day for credit unions during Katrina and Rita. "I strongly urge credit unions to consider shared branching as part of their disaster business continuity plans," Earl said.
Regulators are taking a more active role today on how good a business plan should be. They and the leagues are conducting more educational programs, telling credit unions to back up their systems with redundancy and pay greater attention to how they will communicate with their members.
Earl was getting ready to send out a checklist to leagues explaining how CUNA will coordinate outside efforts in case of another multistate disaster.
Another lesson learned: Credit unions should plan for the emotional toll a disaster such as a hurricane takes on its staff when it considers business continuity, said Earl.
Still, last year's disasters "proved the resiliency of credit unions and the people-helping-people philosophy kicked in," he said. "There are still credit unions assisting credit unions along the Gulf. The Adopt-A-Credit Union program is still in effect, with 21 credit unions adopted. All are up and running and some are still receiving assistance."
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