As Hurricane Harvey approached, the Dallas Fed began to focus on how financial institutions would respond to the storm and how the public’s access to banking services would be impacted. Soon after the hurricane’s initial impact, the Federal Reserve partnered with other federal and state regulatory authorities, as well as industry representatives, on a daily basis to monitor the operating status of financial institutions.
During the first few days after landfall, it became clear the storm damage was severe—and in some cases devastating—to many communities. Where the damage was so severe that it rendered banks’ facilities temporarily unusable, regulatory agencies suspended prior approval branching requirements and communicated to banks that they could share facilities to continue serving their customers.
In the storm’s aftermath, bankers worked diligently to resume operations, with much success. By the end of the first week, more than 95 percent of all affected commercial bank branches reopened to the public. However, some challenges remained.
The ability of banks to provide cash to their customers was a concern. Flooded roadways hampered armored carriers' access to the Federal Reserve’s Houston Branch to pick up cash for delivery to their client banks.
Compounding the challenge, drivers for the armored carriers were focused on their own safety and that of their families, and some were not immediately available. The Dallas Fed issued daily communications to provide clarity on Federal Reserve cash services. Fortunately, banks were prepared and resourceful and were able to meet the needs of their customers.
As banks began to resume operations and plan long-term recovery efforts, bankers turned their attention to customers, many of whom were facing significant financial challenges.
The Federal Reserve, along with other regulatory agencies, encouraged bankers to work with affected customers and emphasized that consideration would be given to changes in banks’ financial condition resulting from the hurricane. In addition, the agencies extended flexibility to banks for filing financial reports and rescheduling bank examinations to minimize burden during the cleanup efforts.
While many will feel the effects of Harvey long into the future, financial institutions in the affected areas demonstrated strong resiliency and remain healthy. Good communication among the Federal Reserve, banks, other regulatory agencies and trade associations was key during the crisis and will continue to play an important role in the rebuilding process.