Banking

Credit unions across Texas dig out after historic winter storm

Amplify Credit Union’s headquarters in Austin, Texas, has been busier than normal this week.

After a once-in-a-generation winter storm pummeled Texas, Amplify CEO Kendall Garrison opened up the $1.1 billion-asset credit union’s corporate office to team members and their families who needed shelter.

Garrison said about 50% of his team did not have power or water at home this week and were experiencing “pretty unpleasant” conditions. Since Amplify’s headquarters maintained utility service throughout the storm, opening up to staff and their families was a no-brainer, he said, and the building is big enough to allow for ample social distancing.

About 10% of the credit union’s employees accepted the offer, he said, in part because roads were icy and many didn’t think they could travel safely.

“Fortunately, conditions are forecast to improve [Friday] and over the weekend, and hopefully this will be behind us soon,” he said.

Amplify has suspended branch operations but has continued to serve members through remote and digital channels, “just as we have for the last year during the pandemic,” Garrison added

With temperatures slowly on the rise, credit unions across the state are still digging out from the storm. Much of the nation suffered lower-than-normal temperatures this week as a result of a polar vortex, but Texas was particularly hard hit, with many parts of the state dealing with significant amounts of snow and ice that resulted in power outages, frozen pipes and more.

The chaos resulting from the storm has created new challenges for credit unions in a region not used to this type of severe weather.

Along with blackouts and frozen pipes, many counties were under orders to boil water before using it, and the cumulative effect of the disaster forced many employees who had been working from home to have to return to the office at least temporarily.

“The challenge was that because everybody was out of power, they had no internet and had to come to the [branch] to work,” said Brandon Michaels, CEO of $2.6 billion-asset JSC Federal Credit Union in Houston. “Then we had to figure out social-distancing requirements, and because the boil orders were in effect, how do you wash your hands? How do you comply with CDC guidelines on COVID when you can’t use the water to wash your hands?”

Arlington-based Texas Trust Credit Union was forced to close many of its branches and offer modified hours at others, said Whitney McLeod, senior vice president of retail and branch operations at the $1.6 billion-asset shop. Some facilities experienced intermittent power outages earlier in the week while another had pipes that froze and burst, leading to over an inch of standing water inside the building.

“The goal is to try to get back to normal next week, but so many things are outside of our control,” she said, including timing on restoration of electric service, and how soon pipes and water damage can be repaired.

A snow-covered Texas Trust Credit Union vehicle sits outside one of the credit union’s facilities after a historic winter storm slammed the state.

Michelle Oshinski, chief marketing officer at $605 million-asset Primeway Federal Credit Union in Houston, said the total impact to members remains unknown. With power outages and spotty cell connections across the city, it has been difficult for people to stay in touch, she said. But it is clear that there are numerous people whose pipes burst and who are also dealing with power outages and low temperatures.

“Unfortunately, we know some won’t have the thousands [of dollars] required to repair the damage and pay deductibles,” she said. “I already know one family planning to try and make the repairs themselves, but they aren’t plumbers.”

Danny Payne, an Austin-based consultant and former commissioner of the Texas Department of Savings and Mortgage Lending, called the conditions “horrible,” with as many as nine inches of snow on top of up to three inches of ice.

“We got sleet on top of that, then more snow,” he said, adding that rolling blackouts were the norm for several days. Payne said at one point temperatures inside his home dropped to as low as 9 degrees.

Caroline Willard, president and CEO of the Cornerstone League, which serves credit unions in Texas Oklahoma and Arkansas, said the group is still quantifying the scale of the ongoing problem. Like many credit unions, the league itself is not yet back to operating at 100% capacity, because so many of its employees are still dealing with intermittent power and internet issues.

“Many parts of our three-state region don’t have snow plows handy, after all,” she said, adding that the league’s foundation is already receiving grant requests from credit unions across the state seeking funds to purchase generators.

Much of the credit union industry was able to quickly pivot to having employees work remotely once the pandemic hit, and many plan to continue with that as an option once the COVID crisis ends. But Mark Arnold, CEO of On the Mark Strategies, a Texas-based consultancy, said this week’s storm has revealed that credit unions “need a mobile work strategy, not necessarily a work-from-home strategy.”

“You have to have employees that can quickly go to a hot spot, someplace that has power, maybe they have to go to a warming station, whatever that might be,” he said. “You’ve got to shift your strategy a bit from work-from-home to a mobile workforce.”

He also advised that credit unions shift from annual strategic planning to shorter, more focused “strategic-planning sprints” held every 90 days.

“As we’ve seen, things can come up that you absolutely could not have anticipated and you’ve got to react quickly,” he said. “If you’ve got this 12-, 18-, 36-month strategic plan that’s not built for agility, you’re going to have a much harder time adapting to these events.”



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