NYC's Municipal Credit Union members' post-9/11 ATM withdrawal behavior, which put the credit union about $15 million in the hole, is making headlines across the country. Almost a year after the area around the nearly $1 billion credit union's office was turned into a war zone by terrorists, disclosures by New York authorities have clearly shown that the credit union's membership of nearly 300,000 members is a microcosm of the American public. The overwhelming number are good, honest people. Some are less than completely honest. Some can only be described as crooks. Overnight, how CU officials are handling this realization, and the news that some members behaved badly, has become a classic public relations case study from which other credit unions can learn. First, in case you hadn't heard about this situation, briefly, here's what its all about. The Manhattan district attorney announced several days ago that it had launched a full-scale investigation of approximately 4,000 of the credit union's members, those who withdrew cash via ATMs that they did not actually have in their accounts. The withdrawals took advantage of electronic glitches in the ATM network caused by the terrorist attack devastation. For a number of weeks the credit union's members, some in desperate need of cash during the chaotic days following the collapse of the twin towers, were given the opportunity to use ATMs on the honor system. In the initial announcement it was disclosed that over 60 members of the approximately 4,000 total who overdrew their accounts have already been arrested. These individuals face felony charges for knowingly withdrawing $7,500 or more beyond their actual account balances. At least another 35 are expected to face similar charges. The good news is that the credit union has already recovered half of the misappropriated funds, either by members returning the funds, or by offending members taking out a credit union loan to handle their payback obligations. The other good news is the way Municipal Credit Union officials are handling a bad situation that put a huge black smudge on the credit union industry's white hat image when the news first hit the street. Comments immediately following news reports were painful: "Credit union members are no different; they will steal like anyone else if given the opportunity." "How sad that members took money that rightfully belongs, not to the credit union, but to fellow members, including firefighters and police officers, many of whom were immersed in the massive rescue and recovery effort at the time the fraudulent withdrawals were being made." Putting on its public relations hat, the credit union was quick to point out that although the 4,000 members involved is a large number, it is a tiny fraction of the nearly 300,000 total members who belong to the credit union. They added that there was reason to believe that some portion of these members made an honest mistake because they were forced to use a system that was not functioning at the time they withdrew money. This theory was supported by the large number of members who immediately returned the funds when notified of their overdrawn accounts. The credit union even gave the benefit of the doubt to those members who probably knew they didn't have anywhere as much money in their accounts as they were withdrawing, by allowing them to repay the excess via a personal loan. This looks like a win/win situation for the credit union as well as those members who may have strayed a bit off the path of complete honesty. This left a small number of members who obviously knew exactly what they were doing. They didn't concern themselves with who was going to get hurt by their greedy actions. All they cared about was that they had a golden opportunity to take advantage of a horrible situation to line their own pockets. They were sure that they wouldn't get caught. They were dead wrong. These people may be going to jail. How obvious were these crooked credit union members? According to news reports, one credit union member made at least 50 separate ATM withdrawals totaling over $18,000. Another member put over $11,000 in cash in her purse by making an astonishing 80 separate withdrawals. While expressing disappointment over such egregious member behavior, again credit union spokespersons stressed that those who so generously helped themselves to cash not theirs were less than 100 in number. The best public relations of all, came about when the credit union was asked point blank if its decision makers regret deciding to let members make withdrawals even though the credit union no longer had the technical wherewithal to track transactions. The answer showed the credit union difference since it appears at this point at least that no other financial institutions in the area went out on a limb for its members/customers. ".we definitely have no regrets," said Thomas Siciliano, the credit union's general counsel. "A large percentage of our members are policemen and firemen and in the wake of 9/11, some of these people were lost, some were missing, their families didn't know where they were. When it was confirmed that we had lost our NYCE (New York Cash Exchange) connection, we opted to serve our members even though we knew that a percentage of them would take advantage of our situation," he added. Stories from that terrible day last September continue to unfold. Here's one that could be looked at two ways. First, for all the bragging credit unions do about member trust and loyalty, among 300,000 people there are bound to be some crooks. Secondly, when its members were most in need, Municipal Credit Union leadership acted decisively and put members needs first regardless of the consequences. Kudos to Municipal Credit Union for its important part in keeping any smudges off the credit union white hat. Comments? Call 1-800-345-9936, Ext. 15, or Fax 561-683-8514, or E-mail [email protected].