Lockheed Georgia Employees FCU CEO Outlines CU Efforts For Pandemic Preparedness; Communication is Key

WASHINGTON – Lockheed Georgia Employees Federal Credit Union CEO Ed Collins testified, jointly for CUNA and NAFCU, before the House Subcommittee on Oversight and Investigations on credit unions’ preparedness for pandemic influenza. Recent disasters-natural and man-made-have tested credit unions systems time and again. Most recently, Hurricane Katrina tested the mettle of credit unions in the Gulf Coast area. “In the first few weeks and months after Katrina hit,” Collins said during the June 29 hearing, “all aspects of the credit union system, including credit unions from states outside the hurricane area and credit union leagues, NCUA, the national trade organizations, and state regulators worked together to provide assistance and coordinate relief efforts within the credit union system. “In fact, for many months a displaced credit union operated from within my credit union. We also took special steps to make cash available to relocated credit union members in our community.” The credit union CEO pointed out that a recent Federal Financial Institutions Examination Council report stated that business continuity plans of financial institutions generally worked well. However, Collins told lawmakers, “Refining our [continuity] plan is a priority at my credit union-in particular my human resources staff-has worked hard to achieve. “Consistent with credit unions’ tradition of member service our focus will be to ensure members have timely access to their accounts.” He also commended NCUA and Treasury officials for the work they have done in providing guidance on business continuity. As part of its examination process, NCUA is reviewing credit union readiness. Some of the lessons learned from Katrina, Collins said, included: * Financial institutions developing appropriate, well-tailored plans; * Regulators providing guidance and resources; * Regulators being proactive in communicating information; * Continuing financial sector coordination and establishing best practices; * Financial institutions keeping informed; * Regulators providing reasonable leeway to impaired institutions for compliance; * Regulators working with Congress to facilitate electronic access to accounts; * Coordination at all levels of government in a timely manner. However, Collins’ written testimony said that further clarifications are necessary from the government like information sharing beyond the core matters to what schools and daycare centers are closing for parent-employees? Can credit unions rely on telecommunications for employees who need to work from home? Will there be regulatory flexibility in consideration for reduced staffing? Who will flip the switch to pandemic mode? Currently, H5N1 strain of avian influenza has been found in certain parts of the world, particularly East Asia. According to a statement from the subcommittee, if this strain of flu mutates so it can be easily transmitted between people, a pandemic becomes more likely. At that point when it evolves into a virus capable of “efficient, sustainable human-to-human transmission,” Treasury Deputy Assistant Secretary for Infrastructure Protection and Compliance Policy Scott Parsons said, the Department of Homeland Security is the entity to notify Treasury and others of a pandemic, which triggers everything else into action. He pointed to the Financial Services Sector Coordinating Council, that CUNA and NAFCU are members of, which can notify financial institutions nationwide within a matter of minutes. “Communication is a vital part of our strategy to share information about the pandemic and also share information with each other,” Parsons explained. These essential communications are also distributed through the primary regulators. Others testifying included American Bankers Association President and CEO Ed Yingling, Northwestern Mutual Life Insurance Company Vice President and Medical Director Robert Gleeson, and Morgan Stanley Global Business Continuity Planning Managing Director Gregory Ferris. [email protected]