MADISON, Wis. (9/1/10)--Credit unions affected by Hurricane Katrina in 2005 have seen unprecedented challenges the past five years since the Gulf Coast disaster. How well did they recover?
Wearing a face mask and poncho as protection from thick mold inside The New Orleans Firemen's FCU's east branch, Kathy Dionne, former branch manager, reaches for a mold-covered musical fire engine. (Photo provided by CUNA).
Today News Now
looks at one credit union that not only survived but is thriving, despite members moving from New Orleans. Tomorrow, News Now
will provide statewide analysis from the Gulf Coast leagues, which helped coordinate efforts to help their credit unions survive the catastrophe. The New Orleans Firemen's FCU (NOFFCU) has seen a lot of changes since Aug. 29, 2005, according to Judy Delucca, president/CEO. Her credit union lost a branch when the New Orleans levee broke. Nineteen of its 57 employees lost their homes. Several employees lived in converted quarters at the credit union through March 2006, when the credit union provided trailers and recreational vehicles to move to their properties while they rebuilt. They ended up living in trailers through the end of 2007. Today, 15 of the 19 still work at the credit union. Those who left did so when spouses were transferred out of state. Employees who lived in St. Bernard's Parish cannot rebuild there. Instead they moved to the North Shore, to Slidell and Mandeville. The credit union has built new branches to accommodate the growing membership there. The major change is a growth spurt. Before Katrina, the credit union counted five branches. Today, it has nine. It grew from $75 million in assets before the hurricane to $135 million. Today it has more than 18,000 members--growing faster the past three years than before--and 300 select employee groups (SEGs). "Today we're more innovative about sharing facilities and working cooperatively. We're members of Shared Branching with the credit union cooperative, and we use credit union Shared Branching networks across states," Delucca said. "We had large numbers of members who moved away but kept their accounts because shared branching allowed the credit union to keep providing them great service," Delucca told News Now
. She noted that the credit union's greatest number of members is in New Orleans. "Our next-greatest is in Atlanta, Houston and Dallas--where people went when they evacuated. "We've learned that though members move, the credit union can continue to serve them and serve them well, and keep them within the credit union movement." She said that the credit union had a good name after Katrina because it was there, servicing members. There were also operational changes. Before Katrina, everything was run, driven and controlled in-house. The credit union owned its ATMs. Now it outsources them to a third-party vendor and has a 24/7 call center in Dallas, with one in New Jersey as a backup. NOFFCU also added new layers to facility management, which, in an emergency, secures facilities, obtains generators, puts up plywood on windows, and turns off electricity and gas. Before Katrina, managers had to know where the water and gas lines were. "Now in the event of a hurricane, we keep operations running and have employees in a safe area. And it's seamless. The phones switch, the members get their updates with a computer. The management team doesn't have to travel. They can be in touch by cell phones, text messages, provide information for the call center...It worked well," Delucca said. In October 2005, News Now
accompanied DeLucca and the credit union's East Branch manager, Kathy Dionne, to the flooded branch. The branch was covered in dried, cracked mud and mold from the flood. Its ATM was missing. Today, the branch no longer exists. "We sold the property. New Orleans East has not really recovered yet. There are still a lot of empty apartment buildings, and the area's not stable," DeLucca said. The credit union likely will deploy ATMs at strategic locations, but not provide a physical branch for the next five years. "After Katrina, we were in the recovery mode for the first two years. Now, we're planning forward, not just recovering," she said. The credit union is expanding, having merged with smaller credit unions and added a branch in Picayune, Miss. It plans to build another in New Orleans within five years, depending on the costs of federal regulators' assessments. During the recovery, the credit union considered a community charter to diversify, but "we didn't want to do that. We serve parishers but there is no one community that services the entire area where our branches are. Also, serving multiple SEGs and low-income areas mean we can penetrate more deeply. We look for the underserved; it's a part of what credit unions are supposed to do," Delucca said. "Nobody expected the region and credit unions here to survive, much less thrive," she told News Now
. She attributes survival to "working cooperatively with other credit unions." She also noted that other credit unions from across the nation "helped us and took us in and sent Christmas presents for employees. We wanted to keep it a cooperative." Delucca is already preparing for the next disaster--the BP oil spill. In typical credit union fashion, she's thinking of others. The local economy is based on the fishing industry and tourism, which are affected by the spill. More people are asking for assistance in repaying of their loans. The credit union is working with them to extend agreements and provide workouts because the "the money is not coming in. The department of collections is no longer called that, thanks to Katrina. Today, it's the Member Solutions Center. The name helps employees to remember why they're there."