ABA offers political lifeline on masks, and banks are relieved

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Bankers are embracing the American Bankers Association's public backing of mandatory mask-wearing in branches as the kind of political cover they need to enforce strict public health practices at branches.

With coronavirus cases rising throughout the country, banks' efforts to protect customer and employees' health have clashed with opposition to mask-wearing. Differing guidelines across jurisdictions have forced banks to shift their approach back-and-forth.

“It got to the point a few weeks ago where it was crazy, we were continually changing our policy for employees,” said Luanne Cundiff, president and CEO of the $384 billion-asset First State Bank of St. Charles, Mo., where two of the bank’s three primary markets are under mask–wearing orders. "Banks in different markets where [there are] different requirements were causing confusion," she added.

Cundiff expressed hope that the ABA's recommendation will help establish consistent standards.

“It was good for banks in our position — banks in different markets where it was causing confusion — that our association took the lead,” she said. “I think any kind of push to educate the general public and the workforce is a benefit to us all.”

Branch managers are now in the uncomfortable position of trying to balance the health of employees and customers against longstanding concerns that face masks are a security risk. Face coverings have traditionally been banned inside branches to deter robberies.
Branch managers are now in the uncomfortable position of trying to balance the health of employees and customers against longstanding concerns that face masks are a security risk. Face coverings have traditionally been banned inside branches to deter robberies.

Laurie Stewart, president and CEO of the $738 million-asset Sound Financial Bancorp in Seattle, said employees have been wearing masks voluntarily since the Centers for Disease Control and Prevention recommended it in late April. "It was certainly mixed guidance in the beginning," she said, adding that the ABA recommendation "has really solidified it."

Bank regulators have no formal mask-wearing policies, but acting Comptroller of the Currency Brian Brooks made waves when he said in June that masks in branches could lead to more bank robberies, even during a pandemic.

While public health experts consider face masks an effective measure against spreading COVID-19, opposition to mask-wearing has intensified in some parts of the country.

But after Target, Walmart, Kroger and most other major retailers adopted face mask rules this week following a spike in COVID-19 cases and deaths, the ABA urged financial institutions to follow suit.

"I encourage you today to adopt and publicly pronounce a policy requiring all who enter your branches to wear a mask," ABA President and CEO Rob Nichols said in a letter July 19 to bank CEOs.

The Federal Deposit Insurance Corp., Federal Reserve and Office of the Comptroller of the Currency have left it up to individual banks to decide whether to require face masks be worn in bank branches.

Many of the largest banks already instituted mask policies. Earlier this month, Bank of America became the first big bank to require face masks be worn at all branches. Wells Fargo was a week ahead of the ABA, requiring on July 13 that all employees and customers wear face masks in bank branches, said Peter Gilchrist, a Wells spokesman. About a fifth of Wells' branch network is still temporarily closed, he said.

Both JPMorgan Chase and Citigroup require masks for employees and for customers to follow local guidelines.

Nichols cited research by Goldman Sachs that suggests a nationwide mask policy would help localities avoid economically damaging shutdowns, by limiting the spread of COVID-19 cases. He also cited a Wall Street Journal article about mounting scientific evidence that face masks slow the spread of COVID-19, the disease caused by the coronavirus.

"We owe it to frontline bank staff to prioritize their safety and to contribute to the wider effort to limit the spread of this infection," Nichols said in a press release Monday announcing the policy. In addition to Nichols' letter, the ABA has also published a guide intended to help banks implement face mask policies.

Balancing public health against security

Early on in the pandemic mask-wearing wasn't much of an issue because most branches were closed. But many have reopened as states lifted lockdown orders.

Branch managers are now in the uncomfortable position of trying to balance the health of employees and customers against longstanding concerns that face masks are a security risk. Face coverings have traditionally been banned inside branches to deter robberies.

Stewart said concerns about the spread of the virus quickly took precedence over security concerns.

“We’ve always said, 'No masks in our lobby,' but bank holdups are down and have not been an issue,” she said. "This is a pandemic, so we are doing everything we can to control this."

Some banks placed greeters at branch entrances to ask customers gently to wear a mask, but many institutions feared for employees' safety when customers refused to comply.

“We don’t want our front-line personnel to be the mask police,” Cundiff said. “If our employees encounter an obstinate customer, we instruct them to distance from the person.”

Ed Mills, a policy analyst at Raymond James, said banks now can give customers a reason they must wear a mask.

“Face coverings have become political and banks for the most part would prefer not to be in the middle of a political or cultural debate,” Mills said. “It provides cover to banks, because there is someone to blame. Banks can say, ‘I hear you, but this is the policy of the American Bankers Association.’ ”

The ABA says that, during the pandemic, evidence points to masks being in the interest of anyone inside a bank branch.

"The data clearly show that wearing a mask or face covering when indoors reduces the threat of infection for everyone, which is why we are urging banks of all sizes to adopt this policy," said Paul Benda, the ABA’s senior vice president for risk management. Benda, who previously worked at the Department of Defense where he oversaw a Pentagon program on chemical and biological weapons, has helped lead the ABA’s response to the coronavirus threat.

Nichols' letter to bank CEOs said the trade group's "policy clarity" offers four benefits. "It would continue to protect the health of your bank’s employees and customers [and] set expectations publicly and thereby help frontline employees as they engage with customers and visitors to the branch," he wrote. The policy also would "assist in your bank's risk management [and] help reduce the transmission rate of the virus."

Still, the OCC's Brooks has not changed his position that wearing face masks in bank branches is a security risk. Since at least 1934, when it became a federal crime to rob a bank, the norm is for banks to ban wearing face masks.

"Face masks could lead to more bank robberies," Brooks wrote in a June letter to state and local officials warning of the economic threat from unending lockdown orders. "Lengthy and potentially permanent requirements that individuals wear face masks in many or even all public spaces create the very real risk of increases in bank robberies."

Bank robberies less of a concern, according to data

But heightened security at branches have made robberies increasingly rare. Bank robberies have plummeted in the past decade to 3,033 robberies reported in 2018, down from 6,849 in 2008, according to the latest data from the Federal Bureau of Investigation.

Whether the ABA's endorsement leads to widespread adoption of mandatory mask policies in banks is an open question. Many of its members are also members of the Independent Community Bankers of America. That trade group, so far, has not adopted a mask policy. The ICBA has encouraged banks to require that employees wear masks based on federal, state or local guidelines, but not weighed in policies for customers.

Joel Williquette, the ICBA's senior vice president of operational risk policy, said trade associations should not be in the position of having to dictate national policy.

“The wearing of masks is a health issue not a political issue.” Williquette said. “Community banks want to protect the health of their customers and employees and they are making the tough calls.”

In May, the ICBA published a guide outlining steps community banks can take to ensure a safe environment. The guide states that banks can request that customers remove their masks long enough to allow for identification.

“If the customer refuses to identify themselves, you have the right to refuse service and request that the customer leave the bank,” the ICBA’s guide states.

Meanwhile, the Consumer Bankers Association has also left the decision on masks to its members.

Addressing mask shortages

When the CDC issued instructions in April on how to make a face mask, many bankers responded by asking their communities to sew masks for bank employees and to distribute to essential workers.

Stewart sewed more than 100 face masks while working seven days a week trying to get small-business customers approved for loans under the Small Business Administration's Paycheck Protection Program. She donated the masks to a nonprofit in her hometown of Sequim, Wash., which is an underserved medical community.

“The town has a huge number of seniors and the original need was in the nursing homes,” Stewart said.

Cundiff also was on the front lines trying to navigate the Paycheck Protection Program when her 17-year-old daughter overheard her talking about how the bank’s staff needed face masks. Her daughter sewed more than 200 masks. First State Bank also started a program offering to make a donation to any nonprofit for any customer who made 50 masks.

Bankers said a formal mask policy will go a long way toward controlling the spread of the virus.

Cundiff decided early last week to institute a mask requirement for all customers, vendors and employees. Ten minutes after she made the announcement, she said, “Walmart decided to require face masks as well.”

“I think any kind of push to educate the general public and the workforce is a benefit to us all,” she said.

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Coronavirus Branch banking American Bankers Association Community banks Consumer banking OCC Brian Brooks
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