NEW YORK CITY–After everything it went through after Sept. 11, 2001, Municipal CU thought it had disaster recovery down to a science, but Superstorm Sandy proved there’s always another lesson to be learned.
“Our biggest challenge was telecommunications,” said Kam Wong, CEO of the $1.8-billion credit union whose headquarters is right across the street from what used to be the World Trade Center. “Many of the telecommunications hubs are not stable, so we have had a number of data communications and network problems.”
Lesson learned: have more than one telecommunications provider. “During 9/11, we didn’t have the redundancies built into the system. We had to load the back-up tapes, and they were four days old, so we had to recreate balances,” Wong recalled. “We did away with the tapes, so we had a lot less reconstructing this time around. But we heavily rely on one provider for our phone and data lines. In future, we will have two, if not three, providers so that the back-up is on a different system.”
Almost Back To Normal
As of last week, the credit union was about 98% back to normal, Wong said, with all but two of its branches–one on Coney Island and one off of Long Island–are open. And issues related to some direct deposit and payroll deductions that didn’t process correctly have all been addressed, as well. The problem: the storm cut power before all of the transactions were replicated. The lesson learned: “Next time we will task a couple of employees to actually monitor the back-up, they will literally watch the transactions be replicated,” Wong said.
“Some of the news about this has focused on the 14,000 members whose transactions didn’t process correctly. That doesn’t take into account that that’s a very small percentage of our 250,000 members total, and most of those 14,000 who were impacted understood what we were going through, because they were going through it themselves,” he said. “Certainly, some did complain, but most were very understanding. Moreover, we were honoring withdrawals up to $800 a day even if we couldn’t confirm that money was in their account. So, the deposits weren’t showing, but they still had access to those funds. We didn’t wait for the reconciliation, we honored those accounts.”
As of the middle of last week, Municipal had seen approximately $500,000 in overdraws, but with another payroll coming up in just days, the credit union expected to see most of those overdraws remedied without staff having to lift a finger. But Wong said he knows some of them will still be overdrawn even after the payroll hits. “It’s often just an honest mistake, and they’ll pay it back,” he said. “If they say they can’t pay it back, we’ll convert it to a loan.”
Like numerous other credit unions, Municipal has established a number of emergency relief measures for members–loan payment deferrals, emergency loans, etc. But Municipal isn’t simply issuing a press release about these programs. The credit union is doing a ZIP code analysis to determine which members are most likely to be in need of assistance, and then MCU staff will call those members to tell them about the programs being offered.
“We have learned that you need to offer pre-emptive, proactive help,” he said. “When members are in crisis, and they’re stuck waiting on FEMA, waiting on the insurance company, they’re not thinking about what the credit union can do for them.”