NCUA Board Chairman Rick Metsger said Thursday the federal agency's staff is working with federally insured credit unions in Louisiana to help them continue to serve flood victims and to ensure continuity of operations.
The Louisiana Credit Union League reported Wednesday that the homes and cars of up to 300 credit union employees have been damaged by the worst floods ever recorded in Louisiana. During the first few days of the natural disaster, some credit union employees were housed in boardrooms because they had no place to go.
From Aug. 8 to Aug. 14, more than 2.5 feet of rain deluged parts of the state in what the American Red Cross called the worst U.S. disaster since Superstorm Sandy in 2012. About 13 people died in the flood and more than 60,000 homes were damaged, according to national media reports.
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On Thursday, the Louisiana league also reported 10 branches were still closed. The affected credit union branches are operated by $280 million Baton Rouge Telco FCU, the $47.8 million BRECOFCU, the $343 million EFCU Financial, the $399 million Jefferson Financial CU, the $32.2 million LES FCU, the $752 million Neighbors FCU and the $273 million Pelican State CU. During the first few days of the flood disaster, about 20 credit unions were forced to close their branches.
During natural disasters, the NCUA also works with state regulators and state credit union leagues to ensure all federally insured credit unions are aware of and can utilize NCUA's available assistance.
Under the agency's disaster relief policy, the federal agency said credit unions can make prudent loans with special terms and reduced documentation to affected members, reschedule routine examinations of affected credit unions, guarantee lines of credit for credit unions through the Share Insurance Fund, and make loans to meet the liquidity needs of member credit unions through the Central Liquidity Facility.
What's more, low-income-designated credit unions affected by flooding can apply for up to $7,500 in Urgent Needs grant assistance to repair damage or restore services to members. Agency staff members are helping eligible credit unions in the flooded areas apply for the low-income credit union designation.
Since activating the online disaster relief system CUAid about a week ago for Louisiana flood victims, the National Credit Union Foundation said it collected more than $53,000. In addition, several credit unions and other organizations have contributed thousands of dollars since the the Louisiana Credit Union League launched a social media challenge campaign last week to raise funds for flood victims.
NCUA also encourages credit unions to work with their members and consider options for assisting them that include offering new loans with special loan terms or rates and reduced documentation, providing payment flexibility for current loans, or potentially restructuring existing loans. Federal credit unions with questions about these options should contact their examiners.
"Louisiana's credit unions can and should work with their members, many of whom have lost everything they own, to help them recover and rebuild their lives," Metsger said in a prepared statement. "Working constructively with credit union borrowers who may experience financial difficulty as a result of this extraordinary flooding is in the long-term best interest of both the credit union and the member. In this time of great need, credit unions also may extend a helping hand to nonmembers."
Such services to nonmembers could include check cashing for nonmembers, access to ATM networks, or other means to cash, to meet the short-term, emergency needs. Federal credit unions providing these emergency services must do so on a charitable basis, meaning that service charges cannot exceed direct costs, according to the NCUA.
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Peter Strozniak
Credit Union Times reporter covering credit union operations, fraud, M&As, leagues, business continuity, and breaking news.
