Last update: March 30, 2020.
As the coronavirus (COVID-19) threat makes its way across the country and an increasing number of businesses close or curtail hours to help flatten the curve, retail banks are scrambling to respond to customer and worker safety concerns as well as to guidance from bank regulators and the Federal Deposit Insurance Corporation (FDIC facts).
On March 26, addressing the Financial Stability Oversight Council, FDIC chairman Jelena McWilliams stated, “I want to underscore that our banks are safe. Your FDIC-insured deposits are safe The FDIC is working closely with the other financial regulators to provide necessary flexibility to both banks and their customers in these challenging times.”
McWilliams acknowledged what legislators and consumers already sense: “The brunt of this economic impact is going to fall hardest and fastest on consumers, small businesses, independent contractors, low-income borrowers, and hourly workers.” The FDIC is encouraging banks to work with “all borrowers struggling in this economic environment,” and has taken several regulatory actions “to provide banks with more flexibility to deploy capital to the broader economy.”
Specific to help that will available to small business owners, in a March 30 press call, U.S. Chamber of Commerce vice president of small business policy Tom Sullivan spoke of empowering the banks themselves, in partnership with Treasury and the SBA, to do everything they can to help small business owners: “We are focused on speed, and the banks’ being able to get money onto Main Street immediately.”
Every major bank website now has its own coronavirus help page, designed to give banking customers the information they need to cope with an increasingly uncertain financial environment. These banks’ customer relief resources include information on how to request everything from loan repayment deferment to penalty and fee waivers.
Temporary Branch Closings
Brick-and-mortar banks across the U.S. are modifying or curtailing in-person branch services. For example, some banks are requiring customers to make an appointment to be seen in a branch; limiting customers to drive-through access only; and even closing some branches entirely—all in support of the social distancing that is so critical to slowing the spread of the coronavirus.
Local authorities in cities like New York City and Los Angeles have ordered bars and restaurants to partially close, limiting them to takeout. But those same authorities—and others—have been careful to assure the public that essential services, such as grocery stores and pharmacies, will remain open. As defined for New York City, effective March 22, essential services include shipping, media, warehousing, grocery and food production, pharmacies, healthcare providers, utilities, banks and related financial institutions.
Access to money and banking services is essential and yet, as the popularity of online banking and banking apps demonstrates, most bank transactions today don’t have to be done in person. There are, of course, still a few services you can get inside a brick-and-mortar branch that you can’t do online. And, with so much attention being paid to how long the coronavirus survives on surfaces, some customers may not be keen to share ATM touchscreens with the world at large.
The FDIC in its latest guidance for banks (FAQs for Financial Institutions, Updated March 27) supports flexible approaches to providing alternative service options to customers—which may include temporarily closing branches or limiting customers to using drive-through services—and encourages financial institutions to communicate with customers across all available channels to help ensure awareness of available remote deposit, electronic payment and bill pay service options, both online and via mobile apps.
In its latest guidance for customers (FAQs for Bank Customers, Updated March 20), the FDIC reminds customers that the safest place for their money to be at a time like this (or basically any time) is in an FDIC-insured bank, and that their banks will provide other ways to access it.
The FDIC also is encouraging banks to waive early withdrawal penalties for CDs and ATM fees for those who—perhaps having moved to be closer to family members because of COVID-19—may need to use out-of-town or out-of-network ATMs to get cash. For similar reasons, it’s also encouraging banks to ease restrictions on cashing out-of-town checks and checks from noncustomers.
So what is the branch situation? Not surprisingly, it’s evolving. While financial institutions are considered to provide essential services, some interruption of in-person services is to be expected. Numerous banks, including Capital One, KeyBank, TD Bank and Huntington Bank were among the first to announce changes to their operating hours and practices.
The nation’s largest bank (by assets) has now followed suit: Effective March 19, JPMorgan Chase temporarily closed approximately 1,000 of its branches, which represent 20% of its total footprint, to help ensure the safety of customers and employees.
Chase says it will “continue to adapt” to the changing coronavirus situation and encourages customers to utilize the tools available on the Chase mobile app and at chase.com. Chase’s remaining nearly 4,000 branches are operating on slightly shortened hours (9:30 a.m.–4 p.m.).
Additional temporary closures of branches, as of March 19–21, have been announced by Wells Fargo, PNC, HSBC USA, TD Bank, Truist (BBT and SunTrust), BBVA and Charles Schwab. (Schwab is closing 100% of its offices indefinitely.) BBVA, for example, is transitioning to drive-through service as its primary means of operation and bank lobbies will be available only via scheduled appointments.
If you find it disconcerting to read the words banks and branches closing (even partially) in the same sentence, bank regulators have apparently anticipated your unease: They’ve been urging banks to take steps that will reassure customers they’ll have access to banking services and cash when they need it. Some banks are raising daily ATM withdrawal limits, as well as monthly mobile check deposit limits, now that more people are relying on ATMs to meet their cash needs and are doing more banking from home.
FDIC and OCC Guidance
The Office of the Comptroller of the Currency (OCC) and the FDIC first addressed COVID-19 on March 9 with guidance encouraging banks to meet the needs of customers by “work constructively with borrowers and other customers in affected communities.”
Fast forward only a few days: In an FDIC Statement made on March 13, the FDIC acknowledged the “unique and evolving situation,” which could lead to “significant temporary business disruptions and challenges.” The FDIC also noted that different customers and communities were likely to be affected differently and encouraged flexibility on the part of financial institutions specific to meeting these needs.
In response to the FDIC’s heightened concerns, banks started putting their strategies in place—as best they can, facing the degree of uncertainty that’s at play.
Workers in the gig economy and small business owners have their own concerns, and those go beyond cash. The March 13 FDIC statement also focused on the needs of small businesses “that have less financial flexibility to weather the near-term operational challenges, such as retail, restaurants, and local entertainment businesses, as well as hourly workers and independent contractors.”
While the FDIC works with financial institutions and with federal and state banking agencies to address the challenges, it’s advising customers to work directly with their individual financial institutions to resolve any issues that arise.
On its central coronavirus information page, the FDIC reassures consumers that FDIC insurance is still in force, even during any potential temporary disruption of an individual bank’s operations. During such disruption, customers can still access their funds through banks’ websites and mobile apps. (This also might be a good time to sign up for direct deposit of your paycheck, if you haven’t already.)
The FDIC regularly updates its Information for Bankers and Consumers, including two sets of FAQs, one for bank customers and one for financial institutions.
Two Examples: Capital One and Firstrust Bank
Capital One’s decision, effective March 16, is simply stated: “Your health and safety are our top priority. To minimize health risks from coronavirus (COVID-19), we are temporarily closing select branches and all Capital One Cafés.” The closures will last for an unspecified period of time. For the majority of their banks that are remaining open, “we will primarily serve customers from behind protective glass or through drive-throughs” to help “support the health and well-being of our customers, our associates and our communities.”
If you want to learn more about Capital One’s temporary closings, answers to FAQs are provided on its website. Access is the theme: whether to ATMs, a specific branch or to a customer’s safe deposit box.
Capital One says it would “strongly encourage” its customers to avail themselves of the digital tools the bank provides to help ensure 24/7 access to their accounts, including both online and via the mobile app.
Pro tip: “It’s easier and faster (in most cases) to manage accounts digitally, especially given call time waits may be longer than usual,’’ the FAQs say.
Family-owned, and based in the greater Philadelphia area, Firstrust has served its clients for more than 85 years. Effective March 18, branches will remain open, but walk-in service is temporarily unavailable. Drive-through windows will remain open at branches that have them. For branches that do not have the drive-through option, an appointment is required to receive lobby service.
In a letter now shared on Firstrust’s blog, CEO Richard J. Green states the primary issue: “Together, we are facing a truly unprecedented situation. The global Coronavirus (COVID-19) pandemic is affecting all of our families, our businesses, our communities, and our way of life.”
He goes on to reassure customers that Firstrust is doing “everything in our power” to help ensure that customers receive the service, advice and support they need in these challenging times.
Perhaps most reassuring to Firstrust customers—and to other banks’ customers who may face similar situations in the very near future—Green points out that the majority of banking transactions are conducted digitally already, so that the potential for interruption of service or access is quite limited.
Bottom line: If your bank suddenly joins the ranks of those practicing social distancing by changing access to its physical locations, you’ll still have good access—in the form of the banks’ online services, mobile apps, ATMs and call center support.