Banks in wildfires' path scramble to contact employees
Highly destructive wildfires have California banks enacting crisis management plans.
In the past week, the Camp Fire in Northern California has taken at least 42 lives and destroyed thousands of structures, while the Woosley fire, which is just 35% contained, has burned over 95,000 acres near Los Angeles and caused two deaths.
Mandatory evacuations have taken place in the hardest-hit areas, and the federal government has approved disaster aid for the state.
While banks that operate in the paths of the fires are closing branches and accounting for employees, it is too early to know the extent of the damage, said Beth Mills, a spokeswoman for the California Bankers Association. Much of the focus has been on the town of Paradise in Butte County, where most of the community was destroyed.
Many bank employees were displaced in 2017 after Northern California wildfires that hit Santa Rosa, Sonoma and Napa, Mills said. She added that she expects more to lose their homes this year.
“The first concern is for bank employees and what they're going through ... then the focus shifts to recovery," Mills said. "That’s where the next phase of concern and caring comes in with employee relief funds.”
The Office of the Comptroller of the Currency on Tuesday gave banks it supervises permission to close branches in areas affected by the wildfires. The agency added that banks should make every effort to reopen branches "as quickly as possible" to address customers' needs.
Rabobank in Roseville, Calif., which closed three branches in the path of the Camp Fire, is monitoring the situation to see if, and when, the offices will reopen, said spokesman Gregory Jones.
The $13.5 billion-asset company is waiving late fees for borrowers and overdraft fees for consumer and business checking accounts. The waivers will last through Nov. 30, Jones said.
It is hard to say how many Rabobank employees were evacuated, but Jones said the bank has confirmed that no employees have been harmed.
The Camp Fire "is still active with 0% containment until a day or two ago,” Jones said. “As the fires subside, we will know a lot more.”
JPMorgan Chase is also refunding overdraft fees for retail customers in Butte and Ventura counties and the affected areas of Los Angeles County, said spokesman Erich Timmerman. The $2.6 trillion-asset company, which has been reaching out to employees to make sure they are safe, plans to offer programs to employees in need.
Three of TriCo Bancshares' branches were threatened by the fires in Butte County — though all are expected to survive the blaze. The $6.3 billion-asset company’s employees are safe and accounted for, though many lost their homes, Sandler O’Neill analyst Tim O'Brien wrote in a note after talking to management.
TriCo, which is based in Chico, Calif., is the biggest bank in Butte County, with 10 branches and nearly $1 billion in deposits, based on data from the Federal Deposit Insurance Corp.
The financial impact of the fires for TriCo is unclear. TriCo had millions of dollars in outstanding loans and credit lines to borrowers in the affected market, O'Brien wrote, though some of the loans may be covered by insurance.
“It seems unlikely that the bank, which is so deeply tied to the affected local communities in Butte County, won't suffer some loss as a result of the disaster even if the preponderance of its business lies well outside of the fire area,” O’Brien wrote.
Efforts by American Banker to reach TriCo were unsuccessful.
Some banks have already allocated resources to help clients.
U.S. Bancorp, which has a branch in Paradise, has established emergency grants for employees in need.
The $465 billion-asset company has been unable to assess the Paradise facility’s damage, said spokeswoman Cheryl Leamon. The Minneapolis-based company has used “every mechanism possible” to reach employees, including emergency text messages, emails and phone calls, she said.
“Leaders in the area have been reaching out to employees to verify safety and determine if they have any needs,” Leamon added. “We have emergency grants for housing, food, clothing — anything like that. Longer term, we have an employee assistance fund where they can apply for to help them get on their feet.”
Wells Fargo said in a press release Sunday that it is donating $250,000 to help with wildfire relief. The donations consist of $125,000 to the American Red Cross, $50,000 to the United Way of Northern California, $50,000 to the Ventura County Community Foundation and $25,000 to the Los Angeles Fire Department Foundation.
“Last year, I lost my home in one of the Northern California fires,” Thomas Sands, Wells Fargo's Northern California region bank president, said in the release. “I know of the challenges many families are facing in impacted areas. I am proud that Wells Fargo is providing funding to nonprofits across California so they can help families with immediate needs.”
Wells Fargo spokesman Paul Gomez said the San Francisco company is constantly checking to see what else it can do to help clients and employees. The company is also assisting employees who knew victims from the Thousand Oaks shooting. Some employees also had family members present for the shooting, though all are safe, he said.
The $1.9 trillion-asset company is keeping in touch with employees who have been evacuated, though Gomez said he doesn’t have the total head count.
“We’ll just constantly keep an eye out on the devastation,” Gomez said.