By James Green
June 1 marked the start of Hurricane Season, and with it, credit unions throughout the Eastern Seaboard are dusting off their checklists from last year to make sure they are prepared.
Major hurricanes are defined by the National Hurricane Center as a category three storm or above. Some may be surprised to learn that Hurricane Sandy in 2012, despite its devastation, was not classified as a major hurricane.
Given that 2005 was the last year a major hurricane hit the United States when we saw Dennis, Katrina, Rita and Wilma come ashore, credit unions may feel pretty confident with their plans. But here are some things you may want to consider going into the 2016 season:
Unchartered Territory
The last time we went this long without a major hurricane making landfall was when Ulysses S. Grant was in the White House. Modern records have been kept on hurricanes in this country since 1851. According to the National Oceanic and Atmospheric Administration (NOAA), since that time two major hurricanes have made landfall every three years in the United States. Prior to this year, the longest streak without one was from August 1860 to September 1869.
Why is this important to you?
History has shown that companies are most prepared for a hurricane right after they are impacted by a storm. Chances are that the employees that led you through hurricane season in 2004 and 2005 may no longer be with your credit union. In reviewing your plans this year, not only assess the strength and relevance of your plan, but also identify any employees who have previous experience with hurricanes. What new buildings and branches do you have? Both evacuation and flood zones can change quite a bit over 11 years; you may find that some of your locations would be required to evacuate sooner or are considered to be a higher flood risk than in previous years. What new third-party providers have you added, where are they located, and what will you need from them if a storm hits your credit union?
Cash is King
The Department of Homeland Security has a “Basic Disaster Supplies Kit” that includes items people will need in any natural disaster. The list includes items you would expect to see: food, water, flashlight, and a battery-powered radio. But one thing on this list could have a large impact on credit unions in particular: cash.
After a hurricane, many businesses may find themselves without power. This means purchasing essential items for your family like groceries will require cash as local merchants may not be able to accept credit or debit cards. Cash quickly becomes a necessity in such a situation. During the time leading up to a storm, gas stations, grocery stores, home improvement stores and financial institutions see a heavy influx of customers. As a credit union, do your hurricane preparation plans take this increase in members at your branches into account? How will you handle needing more employees at the branch level when some of those same employees may be focusing on their own personal hurricane preparation? Will your ATMs need to be replenished more often than normal?
More of Everything
The population that the United State Census Bureau identifies as the South has grown from 107 million to 121 million since 2005, an increase of almost 13 percent. More people require more roads, more schools and more businesses. The result is that in the event of a hurricane, mandatory evacuations will take longer.
Your state’s Emergency Management officials take this into account when issuing evacuation orders. An evacuation order that would have been issued 24 hours prior to a storm making landfall in 2005 might be issued 36 hours prior to a storm making landfall today. Your plans should take into account that your credit union may have less precious hours to prepare between the identification of a credible threat of a storm making landfall and a government issued evacuation order than you had in the past.
As the saying goes, proper prior planning prevents poor performance. By thinking through the above scenarios and potential pitfalls, hopefully this year’s hurricane season will be smooth sailing for your credit union, whether there is a major storm or not.
James Green leads the business continuity program at PSCU. He is passionate about life safety and helps credit unions understand the importance of business continuity not just during an emergency, but as an integral part of day to day operations.