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| # NCUA LETTER TO CREDIT UNIONS                                        |
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**NATIONAL CREDIT UNION ADMINISTRATION**

**1775 Duke Street, Alexandria, VA 22314**

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  **DATE:**   **March 2006**           **LETTER NO.: 06-CU-06**

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  **TO:**     **Federally Insured Credit Unions**

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| *        | **Influenza Pandemic Preparedness**                       |
| *SUBJ:** |                                                           |
|          | **Appendix -- Helpful Web Sites**                         |
| *        |                                                           |
| *ENCL:** |                                                           |
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  **REF:**    **Letter to Credit Unions #01-CU-21 Disaster Recovery and
              Business Resumption Contingency Plans**

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**Dear Board of Directors:**

The purpose of this Letter to Credit Unions (LTCU) is intended to raise
awareness regarding the threat of a pandemic influenza outbreak and its
potential impact on the delivery of critical financial services. It
further advises credit unions and their service providers to consider
this and similar threats in their event response and contingency
strategies (business continuity and disaster recovery plans). This LTCU
discusses the National Strategy for Pandemic Influenza (National
Strategy) and the roles and responsibilities it outlines for financial
institutions.

On November 1, 2005, the White House issued the National Strategy, which
discusses the threat and potential impact of a pandemic influenza event.
It also identifies the roles and responsibilities for the federal
government, the private sector, and others.

The current threat originates from an outbreak of avian flu in Asia. It
is unknown if an avian virus will result in a human pandemic. The
widespread nature of this virus in birds and the possibility that it may
mutate over time raise concerns that it will become transmissible among
humans, with potentially devastating consequences.

The National Strategy states that the "private sector should play an
integral role in preparedness before a pandemic begins, and should be
part of the national response." Credit Unions and their service
providers supply essential financial services and, as such, should
consider their preparedness and response strategy for a potential
pandemic. The National Strategy addresses the full spectrum of events.
The main components of the National Strategy address:

-   Preparedness and Communication

-   Surveillance and Detection

-   Response and Containment

The following excerpt describes key roles and responsibilities as
presented in the National Strategy:

*The Private Sector and Critical Infrastructure Entities*

*The private sector represents an essential pillar of our society
because of the essential goods and services that it provides. Moreover,
it touches the majority of our population on a daily basis, through an
employer-employee or vendor-customer relationship. For these reasons, it
is essential that the U.S. private sector be engaged in all preparedness
and response activities for a pandemic.*

*Critical infrastructure entities also must be engaged in planning for a
pandemic because of our society's dependence upon their services. Both
the private sector and critical infrastructure entities represent
essential underpinnings for the functioning of American society.
Responsibilities of the U.S. private sector and critical infrastructure
entities include the following:*

-   *Establishing an ethic of infection control in the workplace that is
    reinforced during the annual influenza season, to include, if
    possible, options for working offsite while ill, systems to reduce
    infection transmission, and worker education.*

-   *Establishing contingency systems to maintain delivery of essential
    goods and services during times of significant and sustained worker
    absenteeism.*

-   *Where possible, establishing mechanisms to allow workers to provide
    services from home if public health officials advise against
    non-essential travel outside the home.*

-   *Establishing partnerships with other members of the sector to
    provide mutual support and maintenance of essential services during
    a pandemic.*

Credit unions and their service providers should review the National
Strategy[^1] to consider what actions may be appropriate for their
particular situation, and whether such actions should be included in
their event response and contingency strategies. Credit unions with a
global presence and those considered critical to the financial system
may have greater preparation and response challenges than those of other
credit unions. However, a pandemic event is a potential threat to any
credit union regardless of size and location. Preparations for employee
safety and business continuity should include consideration of
identified risks.

The official federal Web site, http://www.pandemicflu.gov, contains the
complete text of the National Strategy for Pandemic Influenza and other
important related details.

For specific information regarding the business continuity and disaster
recovery process, please review NCUA's Letter to Credit Unions #01-CU-21
Disaster Recovery and Business Resumption Contingency Plans. That LTCU
states threats can be natural, human, or technical and credit union's
contingency plans should consider a worst-case scenario. To be
effective, the plans should assume that the credit union could not
continue operating at its physical location, due to a natural disaster
or some other unforeseen event, for an extended period.

NCUA will also be issuing a Risk Alert concerning business continuity
and disaster recovery as well as releasing the revised AIRES Information
& Technology Questionnaires which includes a more detailed business
continuity and disaster recovery questionnaire. These two items can help
you prepare for a natural event such as an influenza pandemic.

If you have any questions or concerns, please contact your NCUA Regional
Office or State Supervisory Authority.

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                                Sincerely,

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/s/

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                                JoAnn M. Johnson

                                Chairman
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Enclosure

[^1]: The appendix of this document contains reference sites where the
    reader can find additional related information.