No Need To Empty The ATM, Bank Regulators Say Regulators urge consumers not to drain their bank accounts, after reports of large withdrawals by some customers worried about the coronavirus. The FDIC reminds us the accounts are insured.
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Don't Dash For Cash: Authorities Say There's No Need To Empty The ATM

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Don't Dash For Cash: Authorities Say There's No Need To Empty The ATM

Don't Dash For Cash: Authorities Say There's No Need To Empty The ATM

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STEVE INSKEEP, HOST:

Toilet tissue is not the only paper product that Americans are hoarding. Some people are stockpiling paper money - though there are risks to keeping too much cash on hand. NPR's Scott Horsley reports.

SCOTT HORSLEY, BYLINE: In a frightening time, cash can seem like a much-needed security blanket. In wealthy neighborhoods around the country, there are reports of people pulling tens of thousands of dollars in cash out of their bank accounts. Demand was so high, one bank branch in midtown Manhattan temporarily ran out of $100 bills. The New York Times says the bank was quickly restocked, but federal bank regulators are urging customers to calm down.

JELENA MCWILLIAMS: Forget the mattress. Forget hoarding cash. Your money is the safest at the bank.

HORSLEY: Jelena McWilliams is the chairwoman of the Federal Deposit Insurance Corporation, which safeguards bank accounts. She understands the anxiety the coronavirus provokes but says there's no need for customers to empty the ATM.

MCWILLIAMS: Just as it is not necessarily rational to hoard toilet paper, it is also not rational to hoard cash.

HORSLEY: Some banks have closed branches or limited hours out of concern for their workers. But ATMs are still operating, with frequent cash deliveries from armored trucks. Treasury Secretary Steven Mnuchin noted this week armored truck drivers and others who work in financial services are considered essential parts of the nation's critical infrastructure. Greg McBride of bankrate.com says because that infrastructure is still functioning, the race to grab cash is misguided.

GREG MCBRIDE: This is not a natural disaster, you know, like a hurricane or an earthquake, where the electricity's out, payment systems are down. This is the opposite in many ways in that if you're holed up at home, having a pile of cash isn't going to do you a whole lot of good.

HORSLEY: McBride says homebound customers are better off leaving their money in the bank so they can pay their mortgage or credit card bills online - and where they don't have to worry about loss or theft. Before the coronavirus hit, McBride notes, Americans were steadily moving away from cash, relying more and more on credit or debit cards as well as digital payments.

MCBRIDE: Even the person-to-person payments, that's increasingly done through apps like Venmo or Zelle and not by reaching into your pocketbook, pulling out some green stuff and handing it to your colleague.

HORSLEY: Of course, there are millions of Americans who don't have bank accounts and may have to rely on cash. Some have suggested handling paper money may increase your chances of getting or passing on the coronavirus, although there's little scientific consensus on that.

In some cases, people's rush to pull money out of the bank has been stoked by scam artists. McWilliams says the FDIC warned a California gold dealer last week to stop advertising its products with the false claim that consumer bank accounts could be seized in a time of crisis.

MCWILLIAMS: That is absolutely false. It's patently false. And frankly, it's criminal in my opinion.

HORSLEY: The nation's banks came into this crisis in strong financial shape. Even if a bank fails, McBride says, deposits are insured up to a quarter-million dollars per person.

MCBRIDE: Nobody has ever lost any money that's been protected by federal deposit insurance. And I think that's a point worth underscoring to consumers that are unsettled enough by the events that are going on from a health standpoint.

HORSLEY: So if you need a security blanket in these uncertain times, grab an extra roll of toilet paper - if you can find one. But leave your cash in the bank.

Scott Horsley, NPR News, Washington.

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