WASHINGTON – Over the last year, speculation of major hurricanes and pandemic influenza have worked their way into the lives of Americans while terrorist attacks on American soil after 9/11 have remained in the back of the minds of many.
With June 1 as the official start of hurricane season, the possibility of another major storm is looming in the minds of many along the Atlantic and Gulf Coasts, particularly the still-recovering credit unions in Louisiana, Mississippi, Alabama and Florida. The National Oceanic and Atmospheric Administration recently announced the 80% chance of an "above-normal" hurricane season with 13 to 16 named storms, eight to 10 hurricanes, and four to six major hurricanes. "However, we do not currently expect a repeat of last year's record season," NOAA stated. CUNA recently announced that it has created disaster preparedness tool kits to help keep credit unions up and running through disasters. Under its ongoing R.E.S.C.U. (Relief Effort and Support for Credit Unions) program, the trade association delivered the tool kits to each state league June 1 to help credit unions handle the operational impact of storms and other disasters. They will be distributed by the leagues to the credit unions on an "as needed" basis.
"With the National Hurricane Center predicting a season of eight to 10 hurricanes-of which four to six could become `major' storms of category 3 strength or greater-it is vital that credit unions, particularly along the Southern and Eastern coasts, have plans and tools in place now to support their preparedness," CUNA President and CEO Dan Mica explained. "These tools will support credit union efforts to set their plans to face disasters and emergencies-whether hurricanes or some other occurrence."
Items in the package include a disaster checklist; information on National Credit Union Foundation giving; link to the "Emergency Financial First Aid Kit," developed by Project Hope, to be distributed to CU members; call for participation in the Adopt-A-Credit Union program; and instructions for a daily credit union triage conference call; an AccuWeather forecast for the hurricane season; and a description of CUNA Strategic Services business continuity products. CUNA and R.E.S.C.U. will also soon be unveiling a toll-free telephone number, available for all credit unions, for credit union members to use to obtain information about the status of their credit union. "Our intention is to continually expand on the number of tools and information available to leagues to provide to credit unions during this hurricane season," CUNA Director of Emergency Preparedness Scott Earl said. "There will be more to come as the season progresses. As the weather experts have said: One hurricane hitting where you live is enough to make it a bad season. The crucial message is prepare, prepare, prepare." As part of its duty to keep credit unions functioning for their members, NCUA has said it "will continue to actively require credit unions to plan for contingencies through its examination and supervision processes." The agency is developing an AIRES questionnaire related to disaster preparedness for the examination process and recently issued Risk Alert 06-Risk-01, which builds upon Letters to Credit Unions 01-CU-21 and 06-CU-06, outlining what examiners will be looking for. "Planning and preparation by credit unions is critical in a contingency whether it is natural, man-made or comes with or without warning. Credit union preparedness will help to ensure uninterrupted service to the more than eighty million members when they will need it the most," NCUA Director of Public and Congressional Affairs John McKechnie said.
Letter to Credit Unions 06-CU-06 offers four key responsibilities of critical infrastructure private sector entities:
* Establishing an infection control policy in the workplace, to include, if possible, options for working offsite while ill, systems to reduce infection transmission, and worker education.
* Developing contingency systems to maintain delivery of goods and services during times of significant and sustained worker absenteeism.
* Creating mechanisms where possible to allow workers to provide services from home if public health officials advise against non-essential travel outside the home.
* Establishing partnerships with other members of the sector to provide mutual support and maintenance of essential services during a pandemic.
NCUA is also directing credit unions to the Department of Homeland Security's Web site (www.ready.gov/business/index.html) for additional information and guidance like its three-pronged framework with 1) a plan to stay in business; 2) talk to your people; and 3) protect your investment. This framework includes checklists and necessary areas of planning and preparedness. The main idea is to continue to support employees, members, the community and local economy, and the national economic system.
The agency is also working with the other Federal Financial Institutions Examination Council regulators to prepare a booklet with related guidance that will soon be available.
NCUA has also done its own contingency planning by building it into its annual planning and budgeting and developing a Continuity of Operations Plan.
Avian flu is becoming a more realistic possibility with the recent discovery and ongoing investigation into an extended family cluster of H5N1-infected persons in Indonesia, according to the World Health Organization; seven have died and one has survived so far. At this point, there is no evidence it spread to the greater community or health care workers, but house-to-house surveillance is being conducted.
"Pandemic related business continuity planning has been a high priority this year for large multi-national firms," NAFCU Director of Compliance Anthony Demangone observed. He added that he is also expecting more guidance to come out of NCUA.
The signals he is getting indicate that a pandemic is "not a matter of if but when." Demangone explained that waves of illness are expected in six to eight week cycles with absenteeism of up to 40% between those who are sick, fear catching the virus, or stay at home to care for ill family members.
"What makes a pandemic so unique is that it cuts across all sectors," he pointed out. It will impact the police, military, hospitals, vendors, everything the community relies on, Demangone stressed. This scenario highlights the importance of groups like the Financial Service Sector Coordinating Council, established to facilitate sector-wide coordination to improve critical infrastructure protection and homeland security.
Technology has made contingency plans easier in one regard because many jobs could be performed out of employees' homes if necessary, which is what many contingency plans rely on. However, "Reliance on technology also poses a problem as well," Demangone said. For example, the bandwidth is not available to support that kind of demand for online access, he said.
"The key is to be holistic and be thorough." he said. "One of the key things stressed is the fact credit unions need to have a good communications plan, not only for the credit union but also for the members." Minimizing disruption in services and informing the membership of actions taken is crucial, according to Demangone. -scooke@cutimes.com
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