Cash Economy in Wake of Sandy
“We see a lot of activity…because everything reverts to pretty much a cash economy,” said John Garbarino, chief executive of OceanFirst Bank of Toms River, N.J regarding the squalor in the Sandy-affected region. “It’s like the tide and the full moon. Our branches are very busy.” Executive at banks all over the affected region have referred to the demand for cash. Some banks are operating without power. In order to keep track of transactions, the bank has been forced to use ledgers and keep records of withdrawals with written checks carrying customer and account information. Withdrawals at many branches are being capped at $500, according to WSJ. Of course, for depositors, the security of their personal information should be of a concern. Had they held silver bullion and Bitcoin, they would not even need to deal with the dominant financial system.
For banks, the scene on the ground is somewhat precarious: “If we know customers, we let them in – doing it very old school,” said one Shore Community Bank representative. With six branches and $203 million in assets, the bank saw half of its branches shutdown due to the storm. Damage at one branch cannot be assessed due to the building being inaccessible, not to mention the status of their borrowers.
The bank has taken all its cash out of closed branches and moved it to open ones. It believed it had enough cash on hand to get through Monday, though it has not re-upped its cash holdings. No ATM’s are online. It did not know when it could expect its next cash delivery.
The bank has not yet begun to assess damage bore by retailers, motels, restaurants and homes making up its $113 million loan portfolio.
“It’s too early in the process to even think about going out there to try and get an assessment,” said Mr. English. “Loan officers are calling out to customers and seeing how they’re doing. The topic of conversation is how they are, it’s not about the collateral.”
For many banks, merely keeping enough cash on hand is the big challenge. Denis Salamone, president of Hudson City Savings Bank, said 10 of the bank’s 20 branches in the area were not open. The goal for those that are open is to ensure they have cash.
Small banks are not the only ones working hard to keep cash on hand and function in some capacity. The Citibank branch at 1 Broadway in lower Manhattan might have resumed normal business hours Thursday, but it did so sans phones. In order to withdraw ones money, one must present an ID, after which the teller of a semi-capacity branch calls a fully operation branch to verify funds.