When natural disasters like Helene and Milton strike, the aftermath is inevitably devastating to individuals, families, and entire communities. These are times of pain, need and uncertainty. These are times, too, when a community bank can play a crucial role in relieving some of that pain and uncertainty.
More than just financial institutions, community banks are pillars of community support even in the best of times. But it is especially critical to be there for the community when it’s suffering. The recent surge in lethal tropical storms provides us with a vivid reminder of how devastating a catastrophic weather event can be and with it, how essential community banks are during such crises.
Community banks can step in BEFORE the crisis, making sure that customers are prepared for what’s to come. A newsletter, for example, can communicate tips on preparedness, such as establishing an evacuation (if needed) route, preparing an emergency kit, having an emergency plan, knowing where to get reliable weather updates, and making sure to have food, fuel and funds on hand.
Whether a customer or small business owner, the most pressing need after a natural disaster is access to funds. Community banks, with their personal relationships in their communities, are uniquely positioned to help their customers regain their financial footing in a time of crisis. Unlike larger, national banks, community banks can move quickly to meet the immediate needs of customers who could benefit from some financial relief. How? Here are some suggestions from a 2020 Consumer Compliance Outlook issue penned by Alinda Murphy, Lead Examiner and Supervisory Specialist, Federal Reserve Bank of Kansas City:
- “Waiving ATM fees for customers and noncustomers;
- Increasing ATM daily cash withdrawal limits;
- Waiving overdraft fees;
- Waiving early withdrawal penalties on time deposits;
- Easing restrictions on cashing out-of-state and non customer checks;
- Using non documentary (i.e., public databases, credit reporting agencies, and contacts with other financial institutions) as well as documentary verification methods to identify customers and noncustomers making transactions;
- Increasing credit card limits for creditworthy customers;
- Expanding the availability of other short-term, unsecured credit products for creditworthy borrowers;
- Providing alternative service options to customers in light of limited ability to access branches;
- Offering payment accommodations, such as allowing borrowers to defer or skip payments or extending the payment due date, which would avoid delinquencies and negative credit bureau reporting; and
- Offering small-dollar consumer and small business loans, including, but not limited to, open-end lines of credit, closed-end installment loans, and appropriately structured single payment loans for temporary cash-flow needs.”
Beyond the steps noted above, local banks can demonstrate their commitment to the community by sponsoring local relief efforts, donating to disaster funds, and encouraging employees to volunteer in community rebuilding projects. They can work alongside local nonprofits, FEMA, and state or local government agencies to coordinate aid distribution. They can offer space for relief efforts, set up mobile banking units in devastated areas, and create joint initiatives for disbursing financial aid. They can commit a portion of their profits or set up charitable funds specifically aimed at assisting with disaster recovery efforts. The opportunities are almost limitless.
Here’s one very recent example. United Community – with 203 offices across Alabama, Florida, Georgia, North Carolina, South Carolina, and Tennessee – is pledging $350,000 to nonprofits aiding in Helene recovery, such as Samaritan’s Purse and the American Red Cross:
“At United Community, we build communities and now we will help rebuild communities,” said Jim Rose, North Carolina state president. “In times like these, we’re reminded that a community is more than just a place on the map – it’s the spirit of its people. And United will be there side by side with our neighbors until our communities are back on their feet.”1
The role of community banks as Good Samaritans
In times of crisis, community banks become more than just financial institutions — they become beacons of hope and stability for their customers, as well as local economies. Whether through immediate financial relief, long-term rebuilding efforts, or simply being a supportive presence, community banks can embody the role of the Good Samaritan by helping their communities recover and rebuild.
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1United Community Bank Foundation Pledges $350,000 to Hurricane Relief Efforts in Western North Carolina. October 2, 2024