Hurricane Harvey: Federal Reserve to supply truckloads of cash to Texas
Banks waiving fees and charges for affected customers.
The Federal Reserve will reportedly deliver much-needed cash supplies to banks throughout southeastern Texas, in an effort to assist those most affected by the devastation of Hurricane Harvey.
In an interview with CNBC, former U.S. Federal Reserve Bank of Dallas president Richard Fisher outlined the Federal Reserve’s capacity to make cash available to affected areas during and after a catastrophic event.
“The two vaults, the biggest vaults in the system, are in Dallas and in Houston. Houston has the largest above-ground vault in the United States,” Fisher said.
“Right now, as happened during Katrina, as happened in former disasters, the Fed stands ready and is fully working to supply whatever cash needs there are.
“This is leading up to the Labor Day holiday, so usually we have a greater demand for cash and a very cash-intensive society here in Texas, particularly in south Texas where we have a heavy Hispanic population.”
Fisher revealed the banks send their armoured vehicles to the Federal Reserve vaults, either bringing currency back or taking currency out, thus circulating it through the system. Around $127 billion passed through the Dallas and Houston vaults last year, amounting to about seven billion banknotes in circulation.
Fisher said the Federal Reserve has instructed banks in affected areas to withhold as much cash as possible in their safes, so they are able to extract these notes and properly disperse them across the devastated region.
Bank of America, BBVA Compass, JPMorgan Chase and Wells Fargo, which all have branches across Texas, said they would waive charges, including those for ATM use outside of their networks, to assist affected customers.
Bank of America will refund fees incurred by consumers and small business customers in impacted areas.
JPMorgan Chase will waive or refund late fees on mortgage, credit card, business banking and auto loan payments, as well as overdraft or monthly service fee charges.
Wells Fargo is reversing fees, such as late fees, for all of its consumer products, including credit cards and checking accounts. The bank’s mobile response unit will enter the affected areas when possible, to begin helping customers receive and process insurance checks.
As far as the economic impact is concerned, Fisher said that while there will be a temporary negative mark, there will be a “snap-back” and that the state of Texas is in a good position to recover financially.
Late last week, the Federal Reserve issued a statement on supervisory practices affected by Hurricane Harvey.
The Fed encouraged banks and financial institutions to work constructively with borrowers in affected communities and to comply, where they can, with regulatory reporting and publishing requirements.
Some institutions may be eligible to receive Community Reinvestment Act (CRA) consideration for community development loans, investments, or services that revitalize or stabilize federally designated disaster areas.
Hurricane Harvey has brought flash flooding and torrential rain to southeastern Texas, while causing major airlines to cancel more than 5,000 commercial flights in, out of and across “The Lone Star State”.