The aftermath is “unthinkable devastation” said New Jersey Gov. Chris Christie when describing the massive destruction left behind by Hurricane Sandy that blasted the East Coast in the evening of Oct. 29. The monster storm caused massive flooding throughout New Jersey, New York and Connecticut, igniting fires that destroyed dozens of homes in New York, leaving more than 8 million homes and businesses from Maine to Michigan without power and even generating a blizzard dumping one to three feet of snow in parts of West Virginia.
The unthinkable devastation of this historic super storm was evident on Tuesday morning when the first images of Sandy’s shocking ruins were seen on the news and is bound to dominate the national headlines for weeks to come. But to what extent the storm affected the credit union industry was difficult to assess at press time.
Widespread power outages primarily in New York, New Jersey, Connecticut and Pennsylvania, and thousands of road closures prevented credit union leaders from communicating and accessing their branches and offices.
CUNA Mutual Group said Tuesday afternoon that is not yet received many reports about Hurricane Sandy damage to credit unions it insured. But the company also said it expects that to change.
“Many of these credit unions are still not able to get to their facilities, so we don’t know the extent, if any, of their damages,” said CMG spokesperson Phil Tschudy.
“Most of the damage reports CUNA Mutual Group has received so far have been from credit unions not impacted by major flooding,” Tschudy said. “Those credit unions are reporting power outages and minor building damage. However, those we are most concerned about have locations in the storm surge flood areas.”
By Wednesday morning, Paul Gentile, president/CEO of the New Jersey Credit Union League, got his first opportunity to survey some of the storm’s ruins.
“I can’t believe the extent of damage on the shore. It is devastating,” said Gentile through a mobile phone text message. “Our CUs are starting to make contact and we will be providing a status update soon. Many CUs are posting ACH and share drafts remotely. No power. Lack of gas and blocked roads are main [obstacles] to doing business. NCUL’s offices remain closed. We continue to operate in biz continuity mode.”
New York Damages
Credit unions across the greater New York City area suffered a wide variety of different damage from the super storm and with different levels of response.
The 5,000-member $30 million Bethex Federal Credit Union, a community development credit union headquartered in the Bronx, N.Y., reported being fully open for business at its one branch and online and available for all transactions.
“Yes, we are open and all systems are go,” reported Bethex founder and CEO Joy Cousminer, a 58-year veteran of the institution.
Cousminer reported that the credit union opened despite the fact that she did not have power or hot water at her home in Manhattan and despite the fact that the credit union’s 23 staffers did not have access to public transportation.
Bethex had arranged ride pools and offered to pay the cab fares of staff that needed to take a cab to make it to work during the emergency.
Cousminer also noted that the credit union had been fortunate in that it had not suffered any flooding in either its member service or back-office facility and that neither facility had large numbers of trees nearby to bring down power lines.
One of the credit unions struggling with the storm’s effects is the 340,000-member $1.8 billion Municipal Credit Union, which has a down website, down phones and a number of members publicly worrying about not being able to access their funds.
A reader named “katricemoored” posted a comment at www.CUTimes.com that said she has not been able to contact the credit union about a check. “MCU website is down and when I call a recording says the phone is disconnected...don’t feel very safe right now...check deposited on Friday still hasn’t cleared. I don’t have anyone money to feed my family.”
Another comment poster who identified herself as Christine Joseph, added, “NYMCU being out is a rather large concern right now to me. My funds get directly deposited–does that mean that it’s just out in limbo somewhere? What about the impact to scheduled recurring payments? Or, for that matter, utilization of my ATM card? I’m astonished that there isn’t a suitable backup mechanism to keep very basic functions going. I moved from the big banks to CU even though they are smaller in comparison but more community focused. Is this the price of moving to a credit union?”
Late Wednesday morning, the credit union issued a statement. “In the aftermath of Hurricane Sandy, like the members we serve, MCU is working hard to restore service. We hope to have some of our branches open later today. Members can call 212-693-4900 for an updated status on branches open. Members can also access their funds through the NYCE network. We hope you and your family are safe.”
And Municipal is not the only credit union to struggle. The 5,800-member, $33 million Lower East Side People’s Federal Credit Union has its branch in Harlem open last Wednesday, but its main branch on the Lower East Side remained closed due to power outages, according to the credit union’s website.
The 22,000-member, $165 million Actor’s Federal Credit Union, headquartered in mid-town Manhattan, had its website up but had to post alternate phone numbers after the credit union’s main numbers went down. “We are operating with limited staff, so there may be delays in processing your requests,” the credit union wrote.
McGraw-Hill FCU president/CEO Shawn Gilfedder said its headquarters in East Windsor, N.J. is running on auxiliary power and its branch at 1221 Avenue of the Americas in New York City reopened for business Wednesday, Oct. 31. He is uncertain, however, about when the branch at 2 Penn Plaza in Manhattan would open because the staff was in-transit to that branch and have been delayed due to the congestion of the mass transit system.
“Our 55 Water Street branch [in downtown New York City] appears to have suffered the worst of the storm, forcing complete evacuation of the building,” wrote Gilfedder in an email to members on Tuesday night.
The Credit Union Association of New York said its member services team is continuing to call all credit unions on Long Island, in the boroughs of the New York City metropolitan area, and Westchester and Rockland counties to assess the level of impact.
“We will also be documenting the level of resources needed. Given the continued state of emergency in those areas, it’s going to be a few days before we have a complete assessment,” Bonnie Sklar, public relations coordinator for CUANY in Albany, said last Wednesday.
The CUNA Mutual Group activated its property and casualty claims disaster team on Oct. 26– three days before Sandy made landfall in New Jersey–contacting credit union leagues in North Carolina, Virginia, Maryland, the District of Columbia, Delaware, Pennsylvania, New Jersey and New York. On that same day, NCUA issued a warning to all credit unions from Mid-Atlantic north to prepare for Hurricane Sandy.
By the early morning hours of Oct. 29, many league offices closed after governors declared a state of emergency, which restricted travel. But league employees were working from their home.
“We are monitoring our credit unions and asking about their plans,” said Jane Bailey, executive vice president of the Delaware Credit Union League in New Castle, Del. “We hope that folks will use their best judgment and make their safety and that or their staffs a priority.”
Indeed, many credit unions throughout Virginia, Maryland, Delaware, New York, New Jersey, Pennsylvania and Connecticut, wisely followed the advice from their leagues and closed up shop by noon or earlier to make sure their employees and members could return home safely. The nation’s largest credit union, the $51 billion Navy Federal Credit Union in Vienna Va., for example, closed 20 branches Monday and closed 18 branches early.
“I can tell you we were well-prepared well in advance of the storm and we are evaluating the situation constantly, Jeanette Mack, corporate communications officer at Navy Federal, said on Oct. 29.
“We also have many credit unions that are closed today and tomorrow,” president/CEO Anthony Emerson of the Credit Union League of Connecticut said in the morning of Oct. 29. “We are preparing for the worst, which is supposed to start today.”
PSCU made its call centers available to help member credit unions impacted by Sandy. The nationwide payments processing CUSO has facilities available that can increase lines of credit on member credit cares, arrange for skipped payments and take other steps that a credit union has pre-authorized to help its members address the impact of the storm.
In Maine, the Maine Credit Union League in Westbook and its subsidiary, Synergent, took precaution to monitor the operations of a service center, which houses MCUL’s data process and IT systems for credit unions through the sate. League and Synergent staffed the facility overnight to monitor the systems for any issues that might occur during the storm.
As thousands of credit unions from New England to North Carolina hunkered down for Sandy’s wrath, snow was falling more than 400 miles away in West Virginia. The National Weather Service in Charleston issued a blizzard warning for 10 cities in the southern and eastern portions of that state.
“In the southern part of the state, they are getting snow already,” West Virginia Credit Union League President Kenneth Watts said on Oct. 29. “Beckley has gotten two to three inches of snow on the ground. But no credit unions there have been closed that we are aware of.”
Sandy’s strong winds colliding with cold winds funneling from the north created a snow machine that dumped one to three feet of snow in West Virginia by Wednesday morning, according to the Weather Channel.
By late Monday afternoon, CUSO Ongoing Operations reported all of its credit union clients in the path of Hurricane Sandy had closed. “Clients with business continuity plans will be able to reopen within an hour or two of the storm,” said Don Stewart, director of professional services for the Hagerstown, Md.-based Ongoing Operations, which was formed to provide credit unions with business continuity planning tools. At this point, all that could be done was to wait in a safe place for the storm’s fury to pass.
The Storm Hits
By 8 p.m. Monday, Oct. 29, the center of Sandy blasted into the southern coast of New Jersey. According to media reports hurricane-force winds extended up to 175 miles from the center of the storm. Its tropical-storm force winds spread out 485 miles that reached the Great Lakes region. When Sandy hit landfall and churned inland, it was reclassified as a post-tropical cyclone.
By late Monday night and early Tuesday morning, the first images of Sandy’s unthinkable devastation filled the newscasts to the shock of millions of Americans.
League offices and many credit unions remain closed Tuesday throughout the East Coast because phone lines were down, as well as wireless systems, and many areas were not accessible because of flooded or destroyed roadways.
The Pennsylvania Credit Union Association, the Ohio Credit Union League and the Virginia Credit Union League did not receive any calls for assistance from credit unions in their state, as of Tuesday afternoon. PCUA Director of Communications Diane Powell said they might not have gotten any reports because many credit unions, particularly in the southeastern portion of the state, have no power and roads were still closed. “We know there are 200 roads that are still closed, mostly in the southeast area, so it could also be a matter that people have not been able to access their credit unions to assess for any damages,” said Powell. “And without power there is really nothing we can do for them right now.”
Some league offices were expected to be open Wednesday, Oct. 31, and were prepared to field calls for assistance from credit unions. Although the New Jersey Credit Union League office remained closed on Wednesday, employees were working from their homes to assist credit unions.
Risk Management Solutions said storm Sandy’s impact on the East Coast is much more severe than last year’s Hurricane Irene, and the catastrophe modeler expects insured losses from Sandy to eclipse the $4.5 billion in losses from Irene. Catastrophe modeler Eqecat says it expects Hurricane Sandy will cause up to $10 billion in losses for the insurance industry. Eqecat puts total economic damages from Sandy at between $10 billion and $20 billion, with insured losses between $5 billion to $10 billion. At the low end of Eqecat’s estimate, Hurricane Sandy would become one of the ten costliest hurricanes in the United States, according to the Insurance Information Institute.