Rising Floodwaters: An Iowa Credit Union Responds

Located in an area that was ravaged by the recent Iowa floods, Metco is helping their members cope with the aftermath.

 
 

Although Hurricane Katrina may be the worst natural disaster to hit this country in decades, other wildly unpredictable events profoundly affect many credit unions and their members every year. Let’s examine how one credit union responded to the devastating June 2008 floods in Iowa: Metco Credit Union ($20.6 million, Cedar Rapids, IA) is in an area that felt the wrath of Mother Nature earlier this summer, as floods inundated the Iowa countryside. The credit union was unable to reach their single branch for over two weeks. At the time, they knew that the branch was not submerged, but could not get to it due to the surrounding floodwater. They also had no way of knowing if the basement, which contained their valuable communications equipment, was filled with water. Thankfully, the credit union had wisely planned ahead…

After receiving word of the impending storm, a mandatory evacuation order was issued for the area that included their branch location. They elevated equipment a few feet off the floor of the basement, shuttered the branch, and gathered checks, stationary, laptops, and a check printer before relocating across town to workspace provided by Quaker Oats Credit Union ($7.1 million, Cedar Rapids, IA). Quaker Oats was Metco’s previously dedicated hot site; the two credit unions share the same data processor and have formed a very positive relationship. Since the disaster, the two are now considering a shared branching relationship.

On Thursday morning, Metco employees were able to showed up for work at their interim location where there was an immediate flurry of activity. They notified members of their situation by posting the news prominently on their website, while the local media broadcast the information and posted it on their websites as well. Their members never experienced a disruption in home banking or ATM service and Metco was able to get their phone service smoothly routed to Quaker Oats. The only small hitch they experienced was getting their data processor fully up and running at the temporary site.

Assisting Their Members

Metco was ready to immediately help members who were directly affected by the flooding. Brad Mertens, CEO of Metco said, “In the first two weeks, many of our members were displaced from their homes and their work. We did what we could to ease their burden.” He continued, “In fact, we granted more loan extensions in the 2-3 weeks following the storms than in the previous 3 years. We also granted emergency $500 loans, using very relaxed lending standards to assist those in need.” Shortly after the flooding occurred, all of the credit unions that were located in Cedar Rapids got together and shared ideas about what each of them were doing to assist their members. The Iowa Credit Union Foundation set up a program to offer emergency $500 grants to members affected by the floods. Metco publicized the availability of the grants to their members and have had around 50 apply, with over half obtaining a grant. Their website prominently displays a ‘Flood Assistance’ category detailing additional assistance that Metco is willing to offer to members who were affected by the floods:

  • Waive the early withdrawal penalty on CDs, allowing instant access to any funds that might have been invested
  • Provide free boxes of checks to replace any that were lost or destroyed
  • No-fee stop payments for lost checkbooks
  • Replace debit cards free of charge
  • Several emergency flood loan options, including extending a payment on an existing Metco loan for those who qualify

The group of Cedar Rapids credit unions also contacted credit unions in the South that were affected by Katrina to find out what they could expect from members in the aftermath of a natural disaster. These contacts mentioned that they received a large amount of deposits in the months following Katrina as their members received insurance funds. Mertens noted, “We have begun to notice a similar trend and are helping many of our members open escrow accounts to hold their funds securely until they decide what they want to do with them.”

As the waters receded, Metco’s staff were relieved to find that the water only made it up to the edge of the doors. The basement only received a few inches of standing water, as opposed to the several feet that they had been dreading. The credit union was lucky that their branch was largely unaffected by the flooding, but they continue to make every effort to help their members who were not so fortunate.

 

 

 

Aug. 3, 2009


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