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Department of Financial Institutions Pledges Assistance to Institutions Disrupted by Hurricane Katrina

Sep 14, 2005

San Francisco – Responding to over 300 financial institutions within the Gulf Region impacted by Hurricane Katrina, the Department of Financial Institutions (DFI) today announced its assistance in providing critical financial services to the people of the affected region and towards the greater recovery effort.

“The damage that Hurricane Katrina has inflicted is devastating. Banks and other financial institutions were not immune to damage, and they must be among the first services to be restored so that the people and cities of this historically vibrant region can begin to recover,” said Secretary Sunne Wright McPeak of the Business, Transportation & Housing Agency, which oversees DFI. “The integrity of financial institutions lies at the heart of this recovery effort, and I am committed to providing support services until local offices are able to reopen.”

DFI urges California financial institutions, including banks and credit unions, to work with borrowers who, because of the effects of the hurricane upon housing and infrastructure, are unable to meet their traditional obligations. Such provisions may include extending repayment terms, restructuring existing loans or easing terms for new loans, all of which will not only assist individuals, but will ultimately contribute to the revitalization of the greater community.

“The challenges posed by Hurricane Katrina are complex and difficult. Financial transactions need to be processed and people need access to their accounts if the Gulf Region is to begin recovering from this disaster,” said DFI Commissioner Howard Gould.

Financial institutions also are encouraged to consider hiring displaced skilled workers from the financial services industry who have migrated to California or are willing to come here for employment. Some financial institutions might consider loaning or donating computers, software, and even temporary workforce (manpower) to the Gulf Region.

While many customers in the affected areas have experienced some disruptions in banking services, they can be confident that their money is safe. Federal Deposit Insurance Corporation (FDIC) and National Credit Union Administration (NCUA) insured accounts are protected by federal deposit insurance. The FDIC and NCUA have set up toll-free consumer hotlines to assist consumers. The FDIC can be reached at 1-877-275-3342 and NCUA at 1-800-827-6282.

DFI supervises more than 650 financial institutions in California. The Department reports to Business, Transportation & Housing Agency Secretary Sunne Wright McPeak and Governor Arnold Schwarzenegger