Despite various local anecdotes and national reports indicating otherwise, some Baton Rouge area banking officials say they haven’t seen a spike in customers withdrawing cash or opting to cash out their paychecks, nor have they capped how much money their customers can withdraw, as fears loom over the financial market volatility triggered by COVID-19.
While he’s heard of some occasional instances of major withdrawals, Louisiana Bankers Association CEO Robert Taylor says this type of activity has generally been “minimal” in the local market in recent weeks. Still, he warns against keeping large amounts of cash at home and stresses that each deposit account at a bank or federally insured credit union is backed by the government for up to $250,000.
“The risk of having cash on your person or at home and the potential negative consequences are clear,” Taylor says. “I have great confidence in Louisiana bankers and federal and state regulators to assure banking is safe and sound.”
Moreover, officials from Regions Bank, Hancock Whitney and IberiaBank also deny multiple claims that, in an effort to mitigate the impacts of the pandemic, their institutions have recently limited the amount of money customers are able to withdraw.
Market representatives for JPMorgan Chase, Capital One, Investar Bank and b1Bank did not respond to requests for comment before this afternoon’s deadline. Taylor says he has no confirmed report of such happening in Louisiana, but notes that customers should talk to their banker to assure maximum FDIC insurance coverage.
“Associates at our financial centers are continuing to help clients with their financial needs with mostly business-as-usual transactions,” says John Daniel, Baton Rouge market president for Hancock Whitney. “Depending on the transaction, banks will sometimes place a hold on deposited funds until the check clears, but that’s standard practice and has nothing to do with COVID-19.”
Evelyn Mitchell, a senior vice president for Regions Bank, says the FDIC and other governmental entities have taken “significant actions to support lending,” such as an interim final rule on technical changes to automatic distribution restrictions, and are encouraging banks to work with their customers. (She declined to comment as to whether the bank has seen an uptick in its cash withdrawals.)
And today, federal bank regulatory agencies announced an interim final rule allowing banks to access a “Money Market Mutual Fund Liquidity Facility,” letting financial institutions receive credit for the low risk of their MMLF activities.
Check out a recent Wall Street Journal article on big cash withdrawals.