Regulators Encourage Banks To Work With Customers Affected By Katrina

Jeanette A. Tucker, Claesgens, Mark A.  |  9/6/2005 10:58:02 PM

News Release Distributed 09/06/05

In the aftermath of the devastation and destruction of Hurricane Katrina, the Louisiana Office of Financial Institutions is urging financial institutions to "work with" their customers affected by the storm.

That’s a bit of good news for consumers who are facing all sort of major challenges, according to LSU AgCenter family economics professor Dr. Jeanette Tucker.

"Any time people are forced to evacuate their homes, access to cash is essential," Tucker stresses. "As a result, financial institutions have developed emergency preparedness plans to provide cash, as well as other basic financial services, to their customers and/or other members in a safe and expeditious manner."

The Louisiana Bankers Association has indicated that all of the major banks based in the New Orleans area are operational through other branches in the state. They also remind consumers ATM accounts that may be temporarily inaccessible from one bank should be accessible through ATM portals offered by other financial institutions.

As part of their disaster recovery and contingency planning, a number of financial institutions in the state have made arrangements to have temporary facilities delivered to various locations in the affected areas. Although the exact locations and times of operation have not yet been determined, such information will begin to be announced by the institutions as soon as possible, Tucker points out.

"Financial institutions in the affected areas are preparing to play an integral role in assisting their customers and members recovering financially from Hurricane Katrina," Tucker said.

The state Office of Financial Institutions also has suggested that financial institutions implement strategies to help with the rebuilding efforts after Katrina. Implementation of these strategies will be determined by each financial institution, but consumers are encouraged to inquire about their availability.

Among the suggestions from that office are for banks, credit unions and others to consider taking the following actions where possible or appropriate:

–Cash checks for non-customers and waive fees for non-customers.

–Waive ATM fees for customers and non-customers.

–Increase limits on ATM daily withdrawal amounts.

–Increase credit card limits.

–Increase credit line limits.

–Reduce late fees on past-due loan payments.

–Restructure debt and ease credit extension terms for new loans.

–Temporarily waive early withdrawal penalties on CDs.

–Expedite release of insurance checks to customer-members.

–Waive restrictive appraisal requirements.

–Rapidly respond to requests for inspections for construction draws.

–Reduce inspection fees and unnecessary paperwork.

The state Office of Financial Institutions and the Office of the Comptroller of the Currency have encouraged financial institutions to generally "work" with their customers or members. They note that doing so can help borrowers recover their financial strength and enable them to be in a better position to repay their debts.

"These recovery efforts can contribute to the health of the local community and the long-term interests of the financial institutions and their customers," Tucker said, adding, "I encourage Hurricane Katrina victims to inquire about special considerations being offered by their financial institutions."

For credit union customers, the National Credit Union Administration has established a toll-free number and e-mail addresses to allow credit union members and vendors to inquire or provide information on the status of credit union operations, particularly in the areas affected by Katrina. The toll-free number is (800) 827-6282. The following extensions must be dialed for inquiries regarding: Louisiana, ext. 4049; Alabama and Mississippi, ext. 3049; and data processing, ext. 8049.

Use the following e-mail addresses to inquire about the status of credit union operations: Louisiana, KatrinaLA@NCUA.gov; Mississippi, KatrinaMA@NCUA.gov; and Alabama, KatrinaAL@NCUA.gov.

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Contact: Jeanette Tucker (225) 578-5398, or Jtucker@agcenter.lsu.edu
Writer: Mark Claesgens (225) 578-2939, or mclaesgens@agcenter.lsu.edu

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