Chairman Matz Urges Credit Unions to Reach Out to Members; Survey Reveals Most Credit Unions Remain Open across the Southeast
Alexandria, Va. (April 30, 2011) – In the wake of the deadliest series of tornadoes in more than 85 years, National Credit Union Administration (NCUA) Board Chairman Debbie Matz activated the agency’s disaster relief policy to assist credit unions and their members in rebuilding and recovering in severely damaged areas across the southeast.
“Credit unions are about people helping people,” said Chairman Matz. “When tragedies like this week’s wave of deadly tornadoes and storms strike, people need to come together. Credit unions should reach out to their members and assist them. For example, credit unions could offer loans with special terms like lower rates or extended maturities. NCUA also remains committed to providing material and technical assistance for storm-affected credit unions.”
According to the latest press reports, this week’s storms have killed at least 350 individuals and caused an estimated $2 billion to $5 billion in insured losses.
In response, President Barack H. Obama has declared a major disaster exists in several southeastern states and ordered federal aid to supplement state and local recovery efforts. The President’s actions make federal funding available for affected areas in Alabama, Georgia and Mississippi. The declarations specifically affect:
- Alabama’s Cullman, DeKalb, Franklin, Jefferson, Lawrence, Marshall, Tuscaloosa, and Walker counties;
- Mississippi’s Clarke, Greene, Hinds, Jasper, Kemper, Lafayette, and Monroe counties; and
- Georgia’s Bartow, Catoosa, Dade, Floyd, Polk, Spalding, and Walker counties.
Additional jurisdictions may receive designation after the completion of further assessments.
Under the agency’s disaster assistance policy, NCUA will, where necessary:
- Encourage credit unions to make loans with special terms and reduced documentation to affected members;
- Reschedule routine examinations of affected credit unions if necessary;
- Guarantee lines of credit for credit unions through the National Credit Union Share Insurance Fund; and
- Make loans to meet the liquidity needs of member credit unions through the Central Liquidity Facility.
As part of its disaster response, NCUA examiners have already surveyed credit unions operating in storm-affected states. Most credit unions remain open, operating business as usual, although some credit union branches affected by damages or with limited access to power may have curtailed hours or services.
At this time, NCUA examiners have only identified one federally insured credit union unable to serve its members from any of its locations: DCH Credit Union in Tuscaloosa, Alabama. A state-chartered credit union, DCH Credit Union has nearly $34 million in assets and approximately 5,700 members.
According to its website, DCH Credit Union anticipates opening for business on Monday, May 2, at one of the institution’s locations. In the interim, DCH Credit Union’s members may conduct business at Alabama Credit Union’s Tuscaloosa branch through a shared-branch network.
After natural disasters, NCUA works with individual state league organizations and state regulators to ensure all federally insured credit unions know of NCUA’s available assistance. The agency’s examiners have therefore remained in close contact with the affected local credit unions to offer advice and assistance. During disaster conditions, NCUA personnel operate under three priorities:
- Ensure the safety of credit union staff;
- Keep facilities and operations available to members; and
- Provide material and technical assistance, as needed, to affected credit unions.
Federal credit unions may also provide assistance to other credit unions and non-members in the affected areas, under certain conditions:
- A federal credit union may provide services to persons who are members of another credit union under their correspondent services authority.
- Emergency financial services for non-members, including check cashing, access to ATM networks, or other services to meet short-term emergency needs of individuals in the areas affected by the storms, can be provided under the authority to engage in charitable activities.
- Federal credit unions providing services on a charitable basis may not impose charges for services that exceed their direct costs.
Credit unions and credit union members needing help in the southeast because of this week’s storms may contact NCUA’s Region III office in Atlanta at 678-443-3000 during normal business hours.
NCUA is the independent federal agency created by
the U.S. Congress to regulate, charter and supervise
federal credit unions. With the backing of the full
faith and credit of the United States, NCUA operates
and manages the National Credit Union Share
Insurance Fund, insuring the deposits of more than
99 million account holders in all federal credit
unions and the overwhelming majority of
state-chartered credit unions. At
Pocket Cents, NCUA also educates the public on consumer protection and financial literacy issues.