WASHINGTON — With the Eastern Seaboard bracing Friday for the arrival of Hurricane Irene, the Federal Deposit Insurance Corp. told banks to look in the not-too-distant past for how to deal with damaging storms.
"As financial institutions and their customers prepare for Hurricane Irene, lessons learned from Hurricane Katrina can be particularly helpful," the FDIC told banks it supervises in a financial-institution letter.
In 2005, banks in the Gulf Coast felt the direct impact of Katrina, prompting concerns among regulators about their safety and soundness as well as efforts to help banks assist in helping their neighborhoods recover. One year later, an interagency guidance discussed how banks' experience during Katrina can help in the preparation for future storms.
That guidance "highlights unique challenges created by significant storms, including communication and power outages, destruction of facilities, and interruption in availability of certain branches and ATMs," the FDIC said Friday.
Among key lessons learned, the FDIC said, are that banks should anticipate communications disruptions and difficulty of staff to reach a recovery area; consider establishing an alternative facility if a financial institution is damaged or destroyed; be prepared to have to operate only in cash; and recognize the bank's potential to aid other local institutions.
"A financial institution's involvement in neighborhood, city, state, and federal volunteer programs can facilitate a community's recovery from a catastrophic event," the agency said.
To view the FDIC letter and the 2006 guidance, visit
