A Network In A Time Of Need: Credit Unions Go National When Disaster Strikes

If we take only one lesson away from 2020, it’s that disasters are going to happen. However, knowing what form those disasters will take and when they will occur is virtually impossible. A year ago, no one would have predicted that the United States would face a deadly pandemic, a massive Gulf Coast hurricane and wildfires engulfing the West Coast. And yet here we are.

PSCU CEO Chuck Fagan told Karen Webster in a recent conversation that his company has spent much of this year helping credit unions (CUs) navigate these disasters and challenges. Those efforts culminated with the National Credit Union Foundation’s recent launch of the CUAid Disaster Recovery App, in collaboration with PSCU.

“One of the most important things in a disaster for a credit union member is still feeling connected with their credit union,” Fagan said. “Having control of their financial life is such an important component of dealing with uncertainty and with tragic events like hurricanes and wildfires.”

Credit union membership is a unique relationship in the financial services ecosystem. Members place a particularly high premium on trusting that their CU will be there for them when they need it most.

But Fagan said that’s a particular challenge given many credit unions’ hyperlocal nature. After all, any natural disaster that physically affects a CU’s local members will likely affect its staff and infrastructure as well. He noted that large national or even regional banks can draw on their geographically diverse networks to support customers during disasters, but credit unions generally can’t, unless they all work together.

Fagan said that’s why the CUAid Disaster Recovery App aims to “pull credit unions together so they are positioned to support each other — maybe in a small way, maybe in a more significant way. If you look at the national banks, they have that distribution of locations and contact centers. Our industry has to use collaboration to make that same dispersed service possible.” 

The good news is that while CUs can’t stop a natural disaster from happening, they can make the recovery a lot less painful for those affected by leveraging the simple power of teamwork.

How It Works

The new app creates an easy and direct path for credit unions to support each other in a crisis.

Fagan said that might mean sending cash reserves to a disaster area’s credit unions that need greater-than-average funds because the power is out, cards aren’t working and customers need money. Or it might mean providing an affected credit union with contact center capabilities so the CU can stay connected to members during a crisis.

Fagan told Webster that the inspiration for the CUAid Disaster Recovery App came from PSCU’s St. Petersburg, Florida headquarters. Staffers there are particularly attuned to the need for disaster preparedness and emergency response due to Florida’s annual hurricane season.

NCUF has already signed up about 65 credit unions and would like to see that grow to 200-plus in the near future. “We are still in Phase One with this,” Fagan said. “I think there are future phases that will emerge as it gets utilized more and individuals from credit unions say, ‘hey, I think it would be cool if we added this.’”

He expects the app to help credit unions get relief efforts up and running faster and more smoothly. That’s critical, Fagan said, because in an emergency, every second can count to the people living through it.

What Comes Next

When asked if such disaster preparedness helped credit unions in their COVID-19 responses, Fagan said that’s a complicated question to answer.

While collaboration is helpful in any scenario, he said, the global pandemic was different from any other national disaster insofar as it’s been, well, global. That means instead of just hitting one region, COVID-19 has affected every credit union.

“What makes the pandemic particularly difficult is that it is just so much larger in terms of impact,” Fagan said.

But once-in-a-century pandemics aside, he does believe that an industry wired to work together when things go wrong will ultimately respond better to any disaster. Fires, floods, storms, earthquakes and the like will always periodically occur, he said, and the better prepared the ecosystem is to pull together, the more likely that everyone will successfully emerge.

“This is one of the key areas I’m certainly proud of being involved in this industry,” he said. “We step up — not only here, but around the world, to do whatever we can to help keep consumers aligned and enabled through their financial institutions.”