Credit Unions

After Hurricane Michael, Credit Unions Step Up To Boost Rebuilding Efforts

When Hurricane Michael tore through the Florida Panhandle last month, it left $4.5 billion in damages in its wake. Now, as residents attempt to rebuild their lives, some local credit unions (CUs) are stepping in to offer loans for essential items like food, transportation and housing. In the latest Credit Union Tracker™, Innovations Credit Union CEO David Southall discusses the hurricane’s impact and the CU’s response strategy.

In early October, Hurricane Michael ravaged the Southeastern United States and parts of Central America, and these areas are still recovering from the damage. In addition to the human toll, the damage includes destroyed homes, vehicles, roads and infrastructures. By some estimates, the powerful storm — which has been linked to 36 deaths in the U.S. — caused approximately $4.5 billion in damages to residential and commercial properties.

As residents rebuild their lives, local credit unions (CUs) are stepping up to help them address immediate financial needs. Innovations Federal Credit Union of Panama City, Florida, for one, is helping members get back on their feet by offering a hurricane assistance loan program and waiving fees.

One month after the hurricane made landfall, recovery efforts remain a tall task, said Innovations CEO David Southall. Some CUs have been forced to close branches, and their employees are addressing recovery efforts of their own.

“I’ve never seen anything like it,” Southall told PYMNTS in a recent interview. “We’re over a month out now and [the community] is still unrecognizable.”

Fixing Communications, Reopening Branches

The Category Four hurricane was one of the worst storms to hit the Florida Panhandle, so after the danger had passed, the Innovations management team immediately got to work. The storm had, unfortunately, knocked out telecommunication services, making it challenging for the team to reach its employees and each other. As a result, Southall posted a physical note at one of Innovations’ branches, asking any staff who visited the location to meet at a designated time and place.

The note worked, and several employees met at the agreed-upon spot to see how they could assist. During the meeting, the CU restored internal communications with prepaid phones, which included Wi-Fi hotspots and allowed the CU to connect to its core operating system from the disaster recovery site.

The next step was to reopen a branch location so members could access cash. The CU was able to open a branch three days after the storm and conduct basic services, including withdrawals and check-cashing via the facility’s drive-through window.

“We had lines that were longer than I had ever seen before,” Southall said.

In addition to offering aid to those who were impacted by the storm, the CU identified members who might have been in financial trouble beforehand, as they were the most likely to be struggling to afford basic expenses as a result. Innovations staff proactively called those with delinquent accounts to see if the CU could offer some kind of financial relief.

“These were people that didn’t have much before the storm; they have nothing after the storm,” he said. “This turned into a humanitarian event more than anything.”

Delivering Hurricane Relief

Immediately following the hurricane, one of the key steps the CU took was to provide members with financial relief as quickly as possible. Quick access to funds allowed members to begin the recovery process — they could hire professionals to remove debris, or access supplies if their homes were damaged or destroyed.

To help expedite these efforts, the CU launched its Hurricane Assistance Loan, which provides qualified applicants with low-interest loans. So far, Innovations has issued more than $200,000 in hurricane assistance loans. Additionally, the CU has waived roughly $27,000 in fees  including out-of-state ATM fees and late payment fees  and issued approximately 1,000 deferrals. These and other disaster recovery efforts speak to the CU’s core mission.

“The [philosophy of a] credit union is ‘people helping people,’” he said. “Even before the storm hit, we already knew how we were going to help our members.”

CEO Patrick La Pine of the League of Southeastern Credit Unions (LSCU)  a trade organization that represents more than 200 CUs in Florida and Alabama, including Innovations  echoed that sentiment. LSCU worked to deliver generators to CUs that needed them, along with supplies like diesel and gasoline.

“Credit unions look for creative ways to give members breathing room during these situations,” La Pine said.

Helping CU Staff To Help Members

Southall noted that the work of Innovations’ staff was a key part of the company’s relief efforts — they put CU members’ needs first.

“We have [employees] that have been with us for a very long time,” he said. “They are loyal to the credit union. We have a cohesive team that all knew what to do without telling each other what to do.”

La Pine agreed that a committed staff is essential to disaster recovery efforts. Part of LSCU’s efforts included grants given to its CUs’ employees, which helped them find short-term housing or vehicles so they could continue to keep their respective CUs open and running. LSCU has issued approximately $385,000 in grants to CU employees in impacted areas.

“A lot of employees at credit unions, like tellers or front-line staff, are living paycheck to paycheck,” La Pine said. “What we focus on … during natural disasters are the necessities of life: housing, transportation and food.”

La Pine and Southall agreed that it will take a long time for communities to recover from Hurricane Michael’s impact. As Thanksgiving approaches, they’re both grateful for having staff members who are ready, willing and able to respond to their missions of helping their communities. In the face of natural disasters, this puts CUs in a strong position to help communities bounce back.

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