- The Washington Times - Friday, September 9, 2005

Hurricane Katrina has shut down some financial services in the Gulf Coast at a time when residents desperately need money for food and housing.

Thousands of automated teller machines are reported to be under water, missing or emptied by looters.

In addition, flood and wind damage shut down dozens of branch banks.

Residents are being forced to use other ATMs or branches to withdraw money or cash checks.

Among the hardest hit was Chase Bank, which operates 60 branches and 120 ATMs in the New Orleans area, where hurricane damage was the worst.

By Thursday afternoon, the bank had reopened 20 of its branches and about the same number of its ATMs. It also temporarily set up 12 ATMs in the parking lot of the Houston Astrodome, where thousands of evacuees are staying.

Chase Bank is the second-biggest bank in the New Orleans area, “so it’s quite a big deal,” said spokesman Tom Kelly. “If we don’t have electricity, our branches are not open.”

Hibernia National Bank, the New Orleans area’s biggest bank, suffered damage to 107 of its 321 branches along the Gulf Coast. By Thursday, 47 were reopened, but 21 branches had sustained “significant damage,” company officials said.

“Hurricane Katrina will continue to have a significant impact on the people and communities in our region,” said Herb Boydstun, Hibernia’s chief executive officer.

Hibernia executives are running their company from one of their offices in Houston, 350 miles away from their New Orleans headquarters.

Independent owners and operators of ATMs also were severely hurt.

“I’d say somewhere around $75 million plus,” Mark Koons, president of the insurance company American Special Risk LLC, said about ATM industry losses from the hurricane.

About 2,500 ATMs that are not owned by banks were damaged in New Orleans and Slidell in Louisiana and the Gulfport and Biloxi areas of Mississippi, he said.

“The scary thing is that we’re still pretty early in the hurricane season,” Mr. Koons said.

Dallas-based Innovus Inc., an ATM operating company, reported about 5 percent of its 2,500 ATMs were affected by hurricane flooding and electrical outages, according to ATMmarketplace.com, a publisher of ATM industry news.

Nevertheless, the recovery is allowing more banks and ATMs to resume service daily.

“By last weekend, about 80 percent of the roughly 240 Federal Deposit Insurance Corp.-regulated banks in the Katrina-affected area had been reached by regulators,” the Congressional Budget Office wrote in a report Wednesday to Senate Majority Leader Bill Frist. “Most were open for business in some fashion.

“There are few reported problems related to the inability of people to make payments. Apparently, the Federal Reserve’s contingency plans are intact.”

The Federal Deposit Insurance Corp., which regulates banks, is asking financial institutions to be generous toward hurricane victims whose loan and insurance payments are due.

Some banks are extending deadlines for payments without penalties. Others are waiving ATM fees for non-depositors until their own banks resume full operation.

The Federal Reserve’s ability to disburse cash to banks and process checks in the Gulf Coast is largely unimpaired, although the Fed’s New Orleans office remains closed.

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