DES MOINES, Iowa — As the harsh economic reality of the Iowa floods took hold last week, with the hardest-hit credit unions girding for an avalanche of loan applications from members who lost homes and jobs.

“We’ve already developed a specific checklist on the applications, and we expect to be very proactive following up with borrowers after 30 days, since we think 60 to 90 days is too long to wait,” declared Richard Benhart, president/CEO of Collins Community CU in Cedar Rapids in detailing relief procedures.

Like other CUs across the state and in neighboring Wisconsin and Indiana, which also bore extensive flood damage, CUs have been quickly and carefully assembling forbearance and late payment packages with regulatory oversight.

“We really haven’t been hit yet by our members, but I expect we will when payments are due on July 1 and that’s when reality hits,” said Benhart whose own $469 million CU, the largest in Cedar Rapids, still has one of its damaged riverfront branches closed. It is not expected to reopen for several weeks.

Collins, like the more than 20 other CUs in major river cities like Cedar Falls, Des Moines and Waterloo, have been in contact through the Iowa Credit Union League with CUs and leagues in Mississippi, Louisiana and Alabama to discuss what Benhart called best practices in how members deal with FEMA, the Small Business Administration and other federal agencies.

“The paperwork is already overwhelming,” observed Benhart as members begin contacting FEMA about insurance claims. “We’re trying to ascertain from our members exactly how long it will take for them to get their money, whether it’s two weeks, 10 weeks or more.”

Credit unions’ experience in Katrina is being used as a model, although “we have to realize that people in Iowa may react differently in rebuilding and moving ahead with their lives than they did in Louisiana,” said Benhart. “We just don’t know yet.”

Meanwhile, the Iowa Credit Union Foundation, separate but affiliated with the Iowa Credit Union League, said disaster relief donations from scores of CUs, league foundations, vendors and individuals were pouring in to its Des Moines office as well as being routed on-line through the National Credit Union Foundation’s CUAid program.

In its most recent tally, $244,000 had been collected by the Iowa foundation in conjunction with National Credit Union Foundation, topping the $244,000 raised by NCUF and CUAid for last fall’s California wildfires though dwarfing the $3.5 million raised by the industry three years ago for Katrina.

Included in the $244,000 was a $100,000 contribution from Iowa Corporate Central CU, which also issued a $50,000 matching grant challenge to the credit union community.

“The money will help thousands of Iowa credit union members affected the flooding,” said a foundation statement. “Thousands of Iowans are in need of support as they begin to recover from the devastating floods,” said Tom Kuehl, Iowa Corporate CEO. “Our contribution will help families get back on their feet, and we are happy to be able to give back to the credit union community.”

Collins donated $50,000 to the fund, the Iowa league donated $25,000 and Linn Area CU, Cedar Rapids, donated $25,000 to help its members, said the announcement.

Fourteen other Iowa CU’s have contributed to the fund, along with Car Solutions/CFS Financial Services, Atlanta; the Louisiana Credit Union League; Members United Corporate FCU; and the Ohio Credit Union Foundation. Also making a donation was the Texas Credit Union Foundation.

“There has been an incredible outpouring of financial support from the entire credit union industry,” said Marybeth Foster, Iowa foundation executive director.

She said her office has received more than a thousand e-mailed disaster relief applications from CU members asking for grants, which the foundation has limited to $500 per case.

An emergency meeting of the foundation’s disaster relief committee was scheduled last Friday in Iowa City to review the process and dole out the first grants.

Still, thousands of the grant applications from victimized members and employees were pouring into CU offices in the worst-hit areas.

“I have 150 applications on my desk alone,” declared James Hagerman, president/CEO of the $168 million Linn Area CU in Cedar Rapids. His employees and officers were given special time off this week, working in teams of six and eight to help in the massive clean up effort of downtown areas.

The losses “are simply staggering to this city,” said Hagerman, noting that his CU was preparing for the expected rush of loan assistance requests in light of new reports issued by the city this week. According to the city of Cedar Rapids, more than 2,000 homes have been destroyed.

The hardships by CU employees across the state were also being felt, he said. On a personal basis, Hagerman’s parents displaced from their damaged home have now moved in with his family on property outside of Cedar Rapids.

In a separate development, the leadership of NCUF, while praising the tremendous outpouring of donations to Midwest flood victims, called for renewed participation in CUAid “beyond the institutional level” to get more grassroots involvement by employees, volunteers and members to make donations for disaster relief.

Steve M. Delfin, NCUF executive director and a former Red Cross top manager heading up disaster relief, maintained that outside the CU community, the “vast majority of donations to help disaster victims comes from individual donors, not institutions.”

In the case of credit unions, he said that most funds raised by NCUF and state foundations “are still institutional–meaning they come from credit unions and industry suppliers. The real potential,” he emphasized, “lies with reaching individual credit union employees and members and providing them with an opportunity to give through CUAid to help credit unions affected by disasters.”

–jrubenstein@cutimes.com