ARLINGTON, Va. – Credit unions along the U.S. gulf coast from New Orleans, Louisiana to Mobile, Alabama continued to gradually pull themselves out of the muck and devastation left in Hurricane Katrina's wake last week, even as it became even more clear that some of them may close or merge as a result of the long term impacts of the storm. The immediate results of the hurricane relief have been heartening. NCUA has reported that a steadily increasing number of credit unions have managed to begin some sort of operations in the wake of the storm, many helped by supplies, time or facilities donated by other credit unions or credit union leagues. But once the insurance payments have been made, the buildings and equipment replaced and the lights turned back on, credit union executives and economists say that the credit unions may face a particularly challenging time as a good number of their members may decide not to return to their now shattered homes, towns and credit unions. “Frankly, what really worries me are the schools,” explained Charles Elliott, CEO of the Mississippi Credit Union Association, headquartered in Jackson, Mississippi. Hurricane Katrina hit the Mississippi coast right at the beginning of the school year and many of the school districts damaged by the hurricane have cancelled any classes for the balance of the school year, effectively forcing parents to make some hard choices between heading back to help rebuild the life they knew before the storm and putting their kids in school. “I just don't see many parents coming back to homes where they can't put their kids into school,” Elliott said. “Instead they will put their kids into the schools where they wind up and once you have done something as permanent as put your kids into school, that's putting down roots,” he added. Another consideration that may keep credit union members from coming back is jobs – or the lack of them. Not only is much of the New Orleans area closed to business until further notice, the executives of whole industries, such as the gambling industry on the Mississippi coast or the shrimp and seafood industries or the tourism industry in New Orleans say their job sites may be closed for months. Without those jobs it's unclear how many credit union members may return to the area and how many of them may just settle down and seek employment wherever the hurricane evacuation effort dropped them. The signs are everywhere. Natchitoches, Louisiana is a small college town far upstate from the New Orleans area, but Catherine Calabria, the owner of a small business in the area, reported that the town has swelled its population by 3,500 people in just over a week and, contrary to what some folks seem to think, Calabria doesn't see them leaving anytime soon – if ever. “Nope, I think they are going to be staying,” said Calabria, the owner of a small coffee shop in the town, “some of them have already said that they plan to look for jobs and to put their kids in school here. I think they are settling in.” Helen Godfrey Smith, the CEO of the $60 million Shreveport Federal Credit Union has drawn similar conclusions from her interaction with hurricane evacuees. Smith reported that she soon became aware that as pressing as the evacuees' immediate needs might be, they also had a very pressing need for job and other assistance which indicated that they are not likely to go back. “We saw that there were agencies who were doing a good job in helping to meet evacuees' short term, immediate needs,” explained Helen Godfrey Smith, CEO of the $60 million Shreveport FCU, “So we decided to do what we could to help them meet their longer term needs.” Part of meeting those needs has included making deals with three area barber and beauty shops to open on Mondays, the days when they are normally closed, to open for a flat fee and to cut the hair of as many of the hurricane evacuees as the credit union can bring them. “These people are starting to have job interviews, they are meeting the public in a wide variety of different circumstances and they want to be able to do what the can to look their best,” Smith explained. The credit union has also helped the evacuees find jobs through hosting job fairs and helped any credit union members among them to get in contact with their credit unions, she said. Smith reported that, among the lower income evacuees in particular, the evacuation has carried with it a feel of getting a fresh start in a place where, because they are evacuees, people have not treated them as though they are low income. “I have just had some conversations with a number of people about this,” Smith said. “A few of them said that they are definitely going back because they can't see themselves living anywhere else,” she said, ” but many of them have said that they plan to live here.” But Craig Beach, marketing director with Credit Union Service Centers, said that while there may be credit union members who don't have a lot of connection with the credit union who wind up leaving their institutions, shared branching should be able to help credit unions in the impacted area retain their members who might not return immediately to their communities but who don't want to abandon all their banking relationships. “ Essentially shared branching, Internet banking and other forms of electronic transactions should provide credit unions in the area a tremendous opportunity to hold on to their members even though they have been dislocated by all these events. Further, Dr. Tun Wai, chief economist with NAFCU, noted that credit unions in the region may just have to hold on until the region makes what will likely be a strong recovery. “You have to remember that the people who founded New Orleans didn't do it on a whim,” Wai said. “The fundamental reasons for the city being there still remain. There still needs to be a port in that location to ship the nation's goods. The region's oil and gas reserves are still there and there is still a market for them. There is every reason to believe that the region will recover and that when it does people will need financial services.” Credit unions in the area may find however, Wai pointed out, that they need to make significant changes to their charters to be able to offer membership to the new people who may move into the region in order to help rebuild it or to renew former businesses. For its part, NCUA has signaled that it stands ready to work with afflicted credit unions to help them weather whatever challenges they might face in the coming months and years. Though he said it is still too soon to discuss specific plans and accommodations, NCUA Executive Director Len Skiles said the agency would be willing to work with credit unions to help them resolve issues such as loans going bad because of hurricane damage and other problems. [email protected]