Disaster Recovery Plans: What Worked and What Didn't for Katrina-Impacted CUs

NEW ORLEANS – In a recent media tour of New Orleans conducted by the Louisiana Credit Union League, credit unions impacted by Hurricane Katrina repeatedly mentioned two things as integral parts of their disaster recovery operations: 1) shared branching, and 2) alliances with other credit unions, credit union-related organizations and credit union vendors. Here’s a broad look at what a couple of credit unions had to say about implementation of these components and others in their disaster recovery plans. For three weeks, the hurricane’s wrath prevented GNO Federal Credit Union from opening any of its four branches. Buildings were under water; staff was sprinkled across the country – some without a home to return to – and members were eager to get cash and answers to their questions. The credit union’s hot site in Jacksonville, Florida, was working within five days, but the credit union had no place to establish a physical office. Neighbors Federal Credit Union, based in nearby Baton Rouge, graciously extended a helping hand by offering temporary workspace, staff and dedicated phone lines to GNO. To personalize the makeshift operations center, Neighbors made credit union signage for GNO. Neighbors employees even offered to house GNO staff during the disaster. Credit union leagues, foundations and individual credit unions also donated money and resources to get the credit union operational again. In addition, GNO is a member of the CU Service Center Network, which allows members to conduct transactions at more than 2,000 credit union branches throughout the country. “It was a lifesaver for us,” said Mia Perez, GNO Director of Marketing. “When members called, we were able to tell them where the nearest service center was to their location so they could cash checks, make withdrawals, or even get emergency loans.” Although shared branching had been written into the credit union’s disaster recovery plan prior to the hurricane, the credit union never would have anticipated operating “service center only” for 21 days, said Eddie Vollenweider, GNO’s VP Information Systems. “We also had contact information for our employees, but with the entire 504 area code shut down (due to downed power lines and overloaded circuits), phones didn’t do much good. We used our Web site to find employees, but were inundated there with members trying to find us,” Vollenweider said. Wings Financial CU eventually created an external Web site for GNO that allowed them to set up blogs to find missing employees. “We soon realized that every member needed information, so we added a list of Frequently Asked Questions to our Web site, covering such questions as `My checks got wet. Where do I order more?’ We had considered audio response to be a back-up means for members to get account information in a disaster, but when telephones are out, that obviously doesn’t work.” Another provision that GNO was forced to work into its disaster recovery efforts was modifying its data processing software, quickly, to allow for loan extensions. “Our vendor initially told us that it couldn’t be done, but they eventually fabricated different ways of doing things that helped us and should help others in the future,” said Vollenweider. GNO also had to make a decision concerning mailing statements. With a large portion of its membership in temporary housing, GNO had to decide what to do about mailing statements. The credit union opted to hold them. The credit union also found out that while its vaults may be fireproof, they are not waterproof. The bottom row of safe deposit boxes was sitting in water when they entered their Metairie branch. To date, no claims have been made on owner contents. And when the credit union wanted to move its records to a secure location so that reconstruction could begin on one of its branches, cardboard boxes were not to be found in the New Orleans area. The CUNA Marketing Council came to the rescue by shipping some in the next day. “You can’t entirely plan for something of this magnitude, but the majority of our plan worked well. Preparing in advance and following the plan really helped us out,” said Vollenweider. “We didn’t lose any computers or phones. And we couldn’t have done it without partnerships. In our time of need, a lot of credit unions, like Neighbors, stepped up and offered to help.” Preparation Pays All five branches of New Orleans Firemen’s Federal Credit Union were affected by Katrina, as well. Weekly disaster recovery meetings prior to the hurricane helped prepare the credit union for what they would face. Large plastic tubs had been equipped with basic items that included: disposable cameras, flashlights, phones, duct tape, extension cords, radios, breathing masks, walkie talkies, glow sticks, hard hats, gloves, first aid kits, Ziploc bags, hammer, cleaning supplies, dustpan, and water. “We laughed each time we went through our drills, but our preparation paid off,” NOFFCU CEO Judy DeLucca said. The credit union acknowledged facing some of the same issues as GNO, such as not being able to mail statements because they didn’t have member addresses. They, too, were able to locate employees and members through a non-secure external e-mail site. And, they were thankful to be a part of shared branching, but said there were glitches. Members could check their account information online, but when they went into service centers initially, they could not be helped because membership could not be verified with the credit union because of downed communications. “The two critical things we missed in our disaster recovery plan were what happens when shared branching is down and what happens when ATM/PIN debit is down?” said DeLucca. UNO Federal Credit Union found help from an unlikely partner – Campus Federal Credit Union. UNO, located in New Orleans, sustained water damage to its building and needed a place to office. Campus Federal Credit Union, which has a field of membership that overlaps UNO’s, helped the smaller credit union set up shop in its Baton Rouge branch. Campus gave them phone access, serviced UNO’s members through their call center, and hooked them into Campus’ intranet system. Campus is also funding UNO member loans, and providing UNO the option of repurchasing the loans. The arrangement has brought the two credit unions closer, according to Campus Chairman Greg Bursavich. One UNO employee is even lodging in a Campus employee’s home. University of New Orleans’ reduced student and faculty populations is cause for concern for UNO’s Chris Maurer, but he believes most people will return to the campus in January. Maurer had to deal with vandalism to his branch resulting from the congregation of airlifted evacuees to high ground near his New Orleans location. Campus, which has three damaged branches of its own in New Orleans, found itself with new challenges as a result of the disaster, such as turning over “contaminated money” to the Fed from flooded ATMs and from New Orleans evacuees’ “wet, soggy billfolds.” “I also discovered that cell phones didn’t work very well, but Blackberries did,” said John Milazzo, Campus CEO. “The two things that saved us in this disaster are shared branching and online banking. Our members are PC-literate, so they are used to checking their accounts online.” Milazzo praised the industry’s cooperative spirit. “We had calls from credit unions all over the country offering us computers, money, furniture. One Colorado credit union said, `Send me your employees. I’ll put them to work. The response has been truly heartwarming.” [email protected]