After Ike: Texas Banks Prepared, Regulatory Relief OfferedIn the aftermath of Hurricane Ike, one of the largest hurricanes on record, the brunt of the forceful storm that struck the Texas Gulf coast is still being absorbed. With an estimated 52 people dead and damages still being assessed across Gulf coast areas of Texas, Louisiana and other states, Texas Banking Commissioner Robert Bacon says his state's financial institutions are expected to work diligently to reopen operations in order to provide financial services to their customers.
"To the extent necessary, financial institutions not capable or immediately resuming normal operations can open in temporary facilities, use facilities of other institutions on a temporary basis, establish a cooperative agreement with other financial institutions to cash checks and waive service charges on using ATMs of other institutions," says Bacon.
Ike roared ashore early Saturday, Sept. 13, at Galveston as a strong Category 2 with 110 mph winds. The only storm researchers were even remotely comparing Ike to was 1961's Hurricane Carla. Carla struck the Texas coast as a Category 4, south of Galveston near Port Lavaca. It had 145 mph winds, producing a Texas record 22-foot storm surge.
Hurricane Ike's 15-foot surge failed to match 20-foot predictions made by weather forecasters. However, records show the maximum surge topped out at about 15 feet at Port Arthur, TX. In Galveston, storm surge was about 11 feet, adding to the waves already kicked up by the storm and crashing over the city's 17-foot sea wall. A surge of about five feet was recorded at Houston.
Ike was even larger than 2005's Katrina, with hurricane-force winds at one point extending out 115 miles. Katrina had hurricane-force winds spreading about 105 miles. The worst storm in Texas history, and the worst natural disaster ever in the United States, remains a hurricane simply known as The Great Storm of 1900. It hit Galveston dead on, without warning, and killed 6,000 people. More than 3,600 buildings were destroyed by its 16-foot storm surge powered by 150 mph winds.
How well prepared were Texas financial institutions? According to Bacon, to the fullest extent possible. "State and federal banking agencies issued emergency orders allowing banks and their branches to close as necessary," he notes. The Department updated its emergency contact information for banks in the affected areas, and telephone calls to the institutions began Monday in cooperation with the FDIC.
Bacon recommends to financial institutions that were in the path of Ike during recovery efforts to think of people first. "The Department of Banking and other regulatory agencies understand that the safety and well-being of its employees and customers are the most important considerations in dealing with this disaster. Banks should follow the guidelines and advice of public officials in deciding when to return to evacuated areas."
The regulatory agencies designated additional staff to handle incoming banker calls for assistance or attention. Before the hurricane hit the Texas coast on Saturday, Bacon says that 57 institutions had closed by noon on Friday. "There is no reliable estimate of how quickly they will reopen until individual situation reports are obtained. The ability of bank personnel to return to evacuated areas and make an assessment of their facilities is dependent upon local officials allowing reentry," Bacon says.
The Texas Department of Banking will work with all affected institutions on a case by case basis to offer regulatory relief. "For example, institutions requesting to open in temporary facilities will receive priority status, and planned onsite examinations will be postponed until operations are resumed," Bacon says.