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ARLINGTON, Va.-NAFCU’s October Flash Report attempted to determine the impact of Hurricanes Rita and Katrina on the credit union community. “While only 5 percent of the responding credit unions were directly affected by the hurricanes, the indirect effects of the hurricanes were much more significant,” the Flash stated. “The credit unions that were directly affected reported that they suffered both branch and ATM damage as well as a rise in loan delinquencies.” A full third of respondents said they expected to see an up tick in loan demand following the hurricanes. Another 18% said they expect a “moderate” drop while 2% expect a “significant decrease.” Ten percent by contrast anticipated a “moderate pick-up in loan demand” and another 3% expect to see a “significant increase.” On the savings side, 24% expect share growth to be affected by the devastating hurricanes; 18% foresee a decrease. Six percent anticipate share growth. More than three-quarters (77%) of respondents said the Fed would continue on its pre-hurricane pace of monetary tightening, heading toward 4% by year-end. However, 9% said it will hold steady at 3.75% and another 14% said it would reach 4.25% by the end of the year. Most credit unions, 93%, said they have contributed to hurricane relief efforts. Thirty-two percent said they offered direct assistance to the impacted area. The most commonly cited relief for financial institutions hit by the sister hurricanes was from Prompt Corrective Action (39%). Next in line was relaxed lending standards at 28%. Loan payment deferrals rated 12% while another 11% said Federal Reserve fee waivers for coin, currency, and wire services. Five percent said relaxed business lending rules would be most helpful and others answered regulation CC (2.5%) easing and RegFlex (2.5%). [email protected]

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