Hurricanes Bring Destruction But Boost Shared Branching Nationwide

ARLINGTON, Va. – Hurricanes Katrina and Rita reigned death and destruction across the Gulf States but they appear to have given a shot in the arm to credit union shared branching nationwide. According to executives with all three of the nation’s shared branching networks, the nation’s most recent bout of storms has at least heightened the interest in credit unions around the country and made some of them positively eager to sign up. Sarah Canepa Bang, CEO of the Financial Service Center Cooperative, the national shared branching network which is headquartered in San Dimas, California, said that that this year’s hurricanes have made autumn, normally a busy time for shared branching anyway, even busier. “I have so many presentations coming up that it’s hard to remember them all,” said Bang. “We have the usual number of folks interested anyway, but then additional credit unions which have called us after the hurricanes. Many people are interested now.” Bang and other executives said a few things are beginning to dawn on credit unions which have helped shared branching advocates make their case. First, credit unions are becoming aware how many of the members are spread out across the country and, second, credit unions are beginning to figure out that something which is primarily a convenience in normal times might turn out to be a highly important lifeline in the midst of a natural disaster. Bang explained that even though most of FSCC’s credit unions are not located in states where the hurricanes came ashore, many of them have members who live in the areas. “You would not have been able to imagine before these storms happened how many credit unions have members in these areas, and all these members need access to their money, particularly now,” she said. Bang reported that one of FSCC’s Washington CUs had nearly 1,000 households in the affected area. Another, in Illinois, has nearly 1,000 households in the region. One Massachusetts CU has over 2,600 households in the area. One of FSCC’s military CUs has nearly 3,000 households in the affected area. And two California CUs each have over 7,000 households in the area. This list goes on and on, she explained, and other shared branching networks have members who report the same thing. The $20 million Carolina FCU, headquartered in Cherryville, N.C. is not anywhere really close to where the hurricanes came ashore, but as the credit union whose original sponsor was Carolina Freight Transfer Company, it has a membership which lives across the country. “We have members in 49 states, explained CEO Donna Beringer, “and those members needed to get at their money to start digging out.” Fortunately a month or so ago, the credit union went online with shared branching through Carolina Credit Union Services and within two days after the storm was able to get members money through a shared branch outlet in Covington, Louisiana. “He needed the funds to buy gas to run the emergency generators someone had sent,” she reported. “He had the generators but nothing to run them on.” In the time it took for the storms to come ashore, Beringer explained, something the credit union had begun promoting to their members as a way to make their financial lives less difficult had become something absolutely essential. That realization has been part of what has really helped the shared branching networks to make their case for participation, according to Craig Beach, vice president for marketing for Credit Union Service Corporation, the shared branching network which is headquartered in Duluth, Georgia. “Shared branching’s role in disaster management has always been something we have talked about in our presentations, but it’s never been at the top of the list,” Beach said. “It’s still not at the top of the list, but now we have a whole lot of real-world examples of how shared branching has helped credit unions bring their members through some real tough times.” The hurricanes’ damage and ongoing clean up have provided a compelling backdrop against which to introduce shared branching, Beach explained. Bang said the impact of the disasters has been to speed up the timeline for CUs joining the shared branching network. Often convincing a credit union to participate in shared branching can be a slow process as each department of the credit union comes on board, she explained, but now in the wake of the hurricanes a lot of the objections people sometimes have about shared branching have been fading away. Jim Hanisch, executive vice president with the CO-OP Network, the credit union owned ATM-Network which owns the Service Centers Corporation, the third, and oldest shared branching network, wouldn’t got that far but said that SCC had seen many of the same things that FSCC and CUSC had been seeing. “It’s really about continuing service and having plans and back-up plans to help your credit unions continue service to their members,” Hanisch explained, “and to try to develop plans which can anticipate contingencies.” He explained that many credit unions had plans in place for how to keep their systems up, but no plans for what could be done if their staff had all been evacuated to different places. Shared branching could help their members in other states continue to have access even if there is no one around to open a local branch. The message about the importance of having a shared branching option in a disaster is one which is gaining heightened interests from credit unions, Hanisch said. -