Kenneth Feinberg, the Obama administration's claims czar on the BP oil spill, has now heard directly from Southeast credit unions that they're ready to provide check assistance to the victims and are hoping a loan guarantee plan can be set up.
It remained unclear, however, how far Feinberg, the New York lawyer and administrator of the $20 billion Gulf Coast Compensation Fund, might go in arranging a guarantee system for small loans made by CUs.
Top staffers of the League of Southeastern Credit Unions met with Feinberg for a half hour on Aug. 29 at the Birmingham airport to discuss the league's offer and what Alabama and Florida CUs should do to provide financial assistance to the hundreds of Gulf Coast businesses affected by the spill, including shrimpers, fishermen and restaurant owners.
Attending the meeting were Patrick La Pine, LSCU president/CEO, and Will McCarty, senior vice president of government affairs.
In a statement, LSCU said the meeting was arranged to explore ways Gulf Coast CUs "might help in several areas including cashing of checks paid to claimants" as well as using the compensation fund as a guarantor on the small loans.
According to LSCU, Feinberg said he would talk to BP officials about the guarantee idea, but he cautioned that "existing regulations and legal requirements won't allow for the fund to guarantee loans by credit unions and banks."
"Feinberg did commit to speak to BP CEO Robert Dudley about this issue," the LSCU statement said. "He promised to convey the message to BP that it would be in their interest to work with credit unions to assist individuals affected by the spill, and that BP guaranteeing loans would be a wise investment on their part."
The claims czar also "recognized the value of strong credit union response to the financial impact of the oil spill," LSCU said. "Knowing that credit unions have the closest relationship to their members, he agreed that credit unions could offer help financially and serve as a great source of information for people who need to file claims."
LSCU said it intends to "work to continue to build its partnership with the Gulf Coast Claims Facility, other involved parties, and state and federal regulators to assist those affected by the spill."
The meeting with Feinberg came the day before a LSCU-sponsored webinar titled "Credit Union Response to the Gulf Oil Spill" held at Pen Air FCU in Pensacola. The session drew 30 CEOs and regulators representing Alabama, Florida Louisiana and Mississippi to discuss how CUs and examiners should be treating small business and consumer loans tied to the oil spill.
LSCU said the forum provided useful dialogue with regulators from the NCUA, the Florida Office of Financial Regulation, the Alabama Credit Union Administration and the Louisiana Office of Financial Institutions.
Tim Hornbrook, NCUA associate regional director, told the group that CUs should take each possible solution on a case-by-case basis. He suggested CUs might waive late and ATM fees and modify loan terms for those most affected.
Robert Hayes, chief of the Florida Bureau of Credit Unions, reminded attendees to review their check-cashing policies before the oil-spill checks begin arriving.
La Pine said he considered the workshop a success. "I thought we had good dialogue between the regulators and credit unions," he said. "A lot of good ideas came from the forum that credit unions can consider."