Prepare for the Worst, but Hope for the Best.

October 29, 2012 at 7:38 am Leave a comment

Let’s say you’re looking at your disaster preparedness plan this morning and it’s not quite as good as you’d like it to be.  If I was in that situation, I would remember several key points to  implement in the coming days.

  • Have a list of the key people on your staff who are going to coordinate the credit union’s response to the hurricane and its consequences.  Make sure they know what their roles are and that everyone has proper contact information.
  • One of the key points stressed by NCUA is the need to keep members properly informed.  Do you know how to reach out to local media, so that in the event the power goes out people might still be able to find out about important events at the credit union through the local radio station?
  • Another key part of your disaster preparedness response is that you know which vendors and regulators need to be reached out to, “ideally” within the first 24 hours.

As the New York Metropolitan Area, in particular, awaits the arrival of Sandy, here are some baseline regulatory requirements to keep in mind.

  • In case you missed it, NCUA came out with a letter to all credit unions about disaster preparations in which it reiterated that member deposits are fully insured up to $250,000.  It also reminded credit unions that it would assist them in maintaining normal operations.
  • NCUA regulation (12 C.F.R. 748.1(b)) requires credit unions to notify the Regional Directors within five days of a catastrophic event.  A catastrophic act is “any disaster, natural or otherwise, resulting in physical destruction or damage to the credit union or causing interruption to vital member services that is projected to last more than two consecutive business days.”  As part of this notification, within a reasonable time after the catastrophic act, a record of the event must be filed with the Regional Director.

Be safe out there.

Entry filed under: Compliance, New York State, Regulatory. Tags: , , .

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Authored By:

Henry Meier, Esq., General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association.

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