Katrina Evacuees Face Obstacles at ATM
SCOTT SIMON, host:
Some Katrina evacuees who are camped around the region have run out of cash. Efforts to use their ATM cards have been unsuccessful. Machines usually say insufficient funds or unable to process account. New Orleans is a regional banking center, and the region's largest banks are struggling to restore services. Banking records, though, should be safe; they are generally backed up in another location. Tanya Ott of member station WBHM reports.
TANYA OTT reporting:
Days after Hurricane Katrina hit the Gulf Coast, many evacuees in Birmingham's Red Cross shelter still could not access their bank accounts. Joe Lorge(ph) and America Williams are both from New Orleans.
Mr. JOE LORGE: We were in a hotel, and the bank that we used got blown away, so we can't draw any money and we can't call home for my wife to send money, so we're stuck.
Ms. AMERICA WILLIAMS: I went to try my ATM card, and when I tried to put my PIN number and stuff in its showing infinite--What do you call it?
OTT: Insufficient funds.
Ms. WILLIAMS: Insufficient funds, yeah. So the money that we do have is like--we down to our last, very, very, very last. And it's hard because we don't know nobody out here.
OTT: Herb Boydstun is president and CEO of Hibernia Bank. With $22 billion in assets and 320 branches, Hibernia is Louisiana's largest bank. Dozens of branches are still not open. Many are underwater in New Orleans.
Mr. HERB BOYDSTUN (Hibernia Bank): Some of our systems were down. They were not able to use our bank-on-land products(ph). Some of the ATM cards, debit cards weren't working. And that was a real serious problem; we apologize for the inconvenience that that caused.
OTT: Along the Alabama and Florida coasts, Compass Bank lost power at dozens of branches, but customers needn't worry that their banking records are lost. Even in the hardest-hit areas where bank branches were destroyed, Elias Awad is a banking expert at the University of Virginia.
Mr. ELIAS AWAD (University of Virginia): Banks by law have to have a backup.
OTT: Awad says that backup can be on disk or tape or both, and is stored in a location far away from the primary records, safe from terrorist attacks or natural disaster.
Mr. AWAD: The one installation we did in Atlanta, the backup, which is the tape at the end of the day, is in a nearby cave in a mountain. That's where you have the humongous vault, air-conditioned and everything, where every day a tape is shipped over there just like shipping cash out of the Fed.
OTT: Bank officials say Y2K and 9/11 forced them to do a lot of scenario planning to prepare for a disaster. But Awad says many smaller local and regional banks can't afford the same high-tech safeguards of larger banks like Hibernia. Even Hibernia chief Herb Boydstun concedes that his company's disaster recovery plans weren't extensive enough. They covered the data and operating systems, he says, but...
Mr. BOYDSTUN: You need to do very good disaster recovery replanning as it relates to communications. Communicating with our people, how do you communicate with your customers, how do you communicate with your employees when everybody has a 504 cell phone number that doesn't work?
OTT: For more than 10 days after the storm hit, customers calling Hibernia's normal customer service line got a busy signal. The company has established special phone lines for customers and employees, and Boydstun says it's reopening three to four bank branches a day. Some analysts speculate that a few smaller local banks in the New Orleans area in particular may never be able to reopen. If they go under, customers won't lose their money completely, but they will have to wade through the bureaucracy of the Federal Deposit Insurance Corporation, which insures bank deposits. For NPR News, I'm Tanya Ott in Birmingham, Alabama.
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