CEOs Talk Disaster Prep as New Fires Rage: Onsite at REACH

Hollywood, Calif. – In October 2017, wildfires near Redding, Calif., destroyed more than 7,000 homes and impacted thousands of Redwood Credit Union members in the way of lost property, lost jobs and suffered psychological damage. Speaking to attendees at the California and Nevada Credit Union Leagues’ REACH conference Thursday, Brett Martinez, president/CEO of the $4.4 billion, Santa Rosa, Calif.-based RCU, described how the credit union offered members 0% interest loans, waived ATM fees, halted loan payment collections and launched a construction loan program during the fire’s aftermath. The ordeal cost the credit union about $1 million.

Meanwhile, Sierra Central Credit Union President/CEO John Cassidy, who spoke alongside Martinez, informed attendees that a new fire was threatening his credit union at that very moment. As of Saturday, the “Camp Fire” in California’s Butte County, one of three fires that broke out in the state Thursday, had completely devastated the town of Paradise, where one of Sierra Central’s branches is located. NBC News reported about 80% to 90% of the town’s homes have been destroyed.

According to a post on Sierra Central’s website, its Paradise branch has been closed until further notice. The credit union is based in Yuba City, Calif., and has $983 million in assets.

Cassidy faces the daunting task of assisting members impacted by the Camp Fire just a few months after the Carr Fire, which impacted three branches and 20 employees, and led to the death of a member who was a local fire inspector, Cassidy said. And in February 2017, Sierra Central employees and members endured the Oroville Dam crisis, in which the main and emergency spillways of the dam were damaged, leading to a surge of flood water from Lake Oroville and the evacuation of more than 180,000 residents. Cassidy said the disaster affected five Sierra Central branches and 30,000 members.

In the timely conference breakout session, Martinez and Cassidy shared some details about their post-disaster experiences. Here are some of their lessons and tips for credit unions preparing for a disaster:

1. Consider your employees first. The CEOs said one of the first orders of business should be booking local hotel rooms for your employees so they can continue going to work should they have to leave their homes. It’s important to take a disaster’s psychological effects into account too – Cassidy said the credit union ensured employees’ meals and housing were taken care of so they could focus on serving distressed members, and Martinez noted all of his employees had to undergo mandatory counseling. “Your employees become social workers … they have members coming in and telling them horror stories,” Cassidy said.
2. Plan ahead and get creative with solutions. Martinez said RCU prepared by pre-purchasing diesel fuel for its generator, for instance. When local schools were closed, the credit union allowed employees to bring their children to work and set up a temporary day care onsite in a community room. “Every day was a different problem,” Martinez said.
3. Develop a solid communications plan. In addition to regularly updating members with account access details via multiple channels, the CEOs said regular employee communication is key. Martinez said RCU developed an automated communications system that allowed employees to easily contact the credit union during a disaster and report whether they were OK. Sierra Central ensured it had cell numbers on-hand for employees’ spouses, and scheduled a conference call every four hours for the disaster recovery team, Cassidy said.
4. Ask a bigger credit union for help if you’re small in size. In response to a question from an audience member about how credit unions with fewer resources can recover from a disaster, Martinez suggested borrowing staff or resources from a larger peer. He noted that RCU is available to help smaller cooperatives in crisis.