|Sandy & Connecticut: Out with the rugs, in with grace periods|
Checklist, teamwork, and hard work got banks open
Swamped coastal airport in Connecticut gives a notion of how much Sandy battered the state's coastline. This is taken from video shot by Connecticut National Guard during flyover of coast to help state assess the damage.
By Ashley Bray, contributing editor
When Hurricane Sandy barreled up the East Coast, it left billions of dollars in damage in its wake. Connecticut's coastline was hit hard, and many of the banks in the area felt Sandy's effects.
Unfortunately, after Hurricane Irene last year, the preparation surrounding an impending storm is nothing new for many of these banks.
"I think our disaster recovery team has met more in the last 24 months than we've probably met in 24 years," says B. Michael Rauh, Jr., president and CEO of $848.2 million-assets Chelsea Groton Bank, Norwich, Conn.
Working the checklist helped
Chelsea Groton Bank has a checklist of precautionary measures it goes through before a big storm hits, including loading up ATMs and making sure generators are ready to go. The bank has permanently installed generators at two of its branches and a number of portable generators at other locations, which allow about half a branch to run.
When five of the bank's 14 branches lost power some for a day, some for a week--these generators allowed the branches to still open fully or partially. Chelsea Groton Bank stayed open until 11 A.M. the Monday of the storm to process deposits from the weekend, and then reopened Tuesday afternoon.
Aside from power outages, one branch also sustained water damage from the rising sea level that flooded the bank. Luckily, the only damage was to the rugs, which all had to be replaced.
Further down the coast in Guilford, Conn., $529.3 million-assets Guilford Savings Bank also relied on generator power to keep its main office running. Six out of seven of its branches went dark for about four days, and where generators weren't available, the branches opened as drive-ups only in an effort to continue to serve customers. As a result, Guilford Savings was closed only Monday and reopened by Tuesday afternoon with essential employees and those who had volunteered to come in.
Guilford Savings credits advanced preparation in helping the bank secure a generator for the storm. "I think preliminary preparing is very important. When we went through storm Irene last year, we debated whether we would get a generator or not," says Margaret Livingston, president & CEO. "This time we acted early and were able to get a rental generator on time."
The bank's relationship with its vendors also helped. "Not having those relationships in place would not have been feasible when everybody else is running around trying to find a generator and get an electrician to connect it," says Bette Lou Rush, enterprise risk manager at Guilford Savings.
Backup communications channels essential
The savings institution also planned ways to communicate when the power went out. Call trees, text messages, and a private business continuity committee Facebook page for management staff, kept all employees connected. "Something we learned from [2011's Hurricane] Irene is that redundant communication is definitely helpful because different people have access to different things," says Rush.
Communication with customers was also important. "During times of crisis, certainly the bank has to be safe and sound, and we have a business to run, but the customers are at the center of the majority of the decisions that we're making at that time," says Rush.
Before and after the storm, the bank sent out emails and used its website to explain to customers that online banking could still be accessed, and that there were programs in place to help customers affected by the storm.
Shortly after the hurricane, Chelsea Groton Bank also instituted an email communication system. "We've got about 15,000 email addresses of customers. That's about two-thirds of our customer base, so in future storms we'll be able to email them directly," says Rauh. "We're trying to use more of those kinds of means to let people know if we're going to be closing early or opening up late."
Financial assistance helps customers
In the aftermath of the storm, both banks aimed to assist their customers. Fees and penalties were waived and accommodations and grace periods were granted on loan payments. Because these measures were given out on a case-by-case basis to those who needed help, no permission from regulators was necessary.
In addition to these accommodations, Chelsea Groton Bank also created an emergency loan program to help people who had damage that wasn't covered by insurance.
Similarly, Guilford Savings instituted a policy that enabled customers to redeem a CD early, without penalty, so that the funds could be used to help pay for repairs. GSB also made hot coffee, homemade cookies, and charging stations available in its branches. In the weeks after the storm, a bank employee who had lived and attended school on Staten Island helped to organize a donation drive at the bank and at a drop-off location. The drive succeeded in filling a 14-foot truck with supplies for a Staten Island shelter.
More lessons to learn
In the wake of Hurricane Sandy, the banks are taking the opportunity to learn from the way they responded to this disaster.
"Once the dust had settled and everybody was sort of back to operating normally, we had about a half-day meeting of our emergency management team just to go through what we did and what we didn't do," says Chelsea Groton Bank's Rauh. "I think when you have the chance to make yourself better based on how you did in a particular disaster like this, it's a great opportunity."
Guilford Savings' Livingston also reviewed her bank's response and found that teamwork was an important factor during the hurricane.
"I think it's important to have very good employee-employer relationships to get the mission done," she says. "It's of the utmost importance to have your team in place working together."
[This article was posted on December 13, 2012, on the website of ABA Banking Journal, www.ababj.com, and is copyright 2012 by the American Bankers Association.]
| TechTopics Plus