Bankers affected by last week's wildfires in southern California used lessons learned from earlier fires in the region, as well as from Hurricane Katrina, to stay in touch with employees and get cash to customers quickly.
Drought conditions, coupled with hot Santa Ana winds from the inland deserts, fueled nearly two dozen wildfires in the region last week, forcing nearly a million people to evacuate and burning about 738 square miles and roughly 2,000 homes.
The brunt of the damage was in San Diego County, where several large fires burned more acreage and homes than the 2003 Cedar Fire there — at the time the largest fire in that county's history.
Applying lessons from the 2003 fire, as well as lessons the entire banking industry took from the 2005 hurricane, the $2.4 billion-asset San Diego National Bank did a number of things differently this time around, said Christopher Crockett, a senior vice president at the unit of the $14.4 billion-asset FBOP Corp. in Oak Park, Ill.
San Diego National set up a toll-free phone number to let employees know whether their branches had closed, and where they would be working instead if it had, Mr. Crockett said. Before each branch manager was in charge of contacting subordinates — a process he called more time-consuming and less accurate.
"This way we made sure everybody got the same message, which cut down on rumor control," such as erroneous messages of branch closings because of imminent danger, he said.
The bank established the number several months after the 2003 fire and has routinely instructed its employees to use it in case of emergency. Mr. Crockett said early education of the new procedures aided greatly during last week's fires.
About 200 bank employees had to be evacuated, and at least one employee's home was destroyed. San Diego National offered evacuees and their families use of its community room, he said.
In 2004, the bank mailed customers newsletters advising them what to do in the event of a disaster — including urging them to get debit cards in case of branch closings or an evacuation that forced customers out of the bank's market. The bank also put evacuation tips on its Web site.
Last Monday 10 branches across the county were closed, but customers were able to use the automated teller machines at those locations.
San Diego National was able to transfer some back-office operations to a remote location near its parent's headquarters in Illinois that had been identified previously in the bank's business continuity plan.
"Katrina showed us that problems could be much more widespread" than typical disasters, Mr. Crockett said. "So now when we think about a disaster, we know to think about using remote locations outside our county — and even out of the state — to back up our downtown operations."
Colleen Haggerty, a spokeswoman for the $1.6 trillion-asset Bank of America Corp. in Charlotte, said it took a cue from bankers in Louisiana and Mississippi, who had reported cash shortages after Katrina, and deployed mobile ATMs at a number of evacuation centers in San Diego County. Noncustomers in the area were allowed to use its ATMs surcharge-free, she said. (See B of A's mobile ATMs
"During Katrina, there was a lack of access to cash, and this was definitely in response to that," Ms. Haggerty said.
Union Bank of California set up an employee phone line during the 2003 fire, but Sharon Woodson-Bryant, a spokeswoman for the bank, said that last week the messages were updated much more frequently this time around — sometimes several times a day — because circumstances were changing so rapidly because of the nature of the fires.
This year Union Bank (a unit of the $54.3 billion-asset UnionBanCal Corp. in San Francisco, which is mostly owned by Mitsubishi UFJ Financial Group Inc.) also put branch closings on its Web site. In 2003 it was just starting to increase its use of the Internet, but this year it used the site even more extensively to communicate with both customers and employees, Ms. Woodson-Bryant said.
As of Monday all Union Bank branches were open, she said.
Darrell R. Brown, a senior vice president at the $228 billion-asset U.S. Bancorp, who spent time in Louisiana helping with the post-Katrina recovery, said that the entire industry is eager to communicate with one another about lessons learned from disasters to improve business continuity plans.
One thing bankers can learn from Katrina, he said, is to make sure that contingency plans are consistent throughout each of the bank's divisions, and that the bank's overall continuity plan is in line with the plans of governmental entities, charities like the American Red Cross, and the bank's insurance company.
U.S. Bancorp now routinely tests the effectiveness of its employee phone trees, which include backup numbers, about three or four times a year, Mr. Brown said. The exercise was the main reason managers were able to contact virtually all of its affected employees during last week's fires, he said. About 50 had to evacuate from their homes.
Also, U.S. Bancorp deployed its "Bank on Wheels," a converted bus that offers mobile banking services, to areas affected by branch closures. Twenty-six of its branches were closed during the height of the fires last week, but all have since reopened, he said.
Many banks in southern California began offering special products such as emergency loans last week to people who lost their homes and belongings, and many announced they would be willing to amend loan repayment schedules.
Also, many said they would match donations collected by employees and customers at branches for the Red Cross and local charities. The Bank of America Charitable Foundation said it would contribute $1 million to help victims and first responders to the wildfires.
