Many banks not understanding of Gulf businessmen
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Tess Vigeland: It’s kinda nice, no, actually, more than kinda nice, it’s really nice to click on that video feed from the bottom of the Gulf of Mexico and see nothing but water. There was never any sound on that video, but it just feels quiet. For the first time in almost three months, oil is not spewing into the Gulf. But the damage to communities remains. This week, the Federal Reserve, the FDIC and other regulators issued guidance to banks, telling them to help Gulf residents with their spill-induced money woes.
Krissy Clark reports.
Krissy Clark: Banking regulators issue statments like these after hurricanes and floods: “This is the first for a man-made disaster.” The goal is to help out people like Chip Dupree, He’s a fishing guide from Mobile, Ala. Makes his livign bringing tourists to waters full of speckled trout. But since the oil showed up?
Chip Dupree: All I can say is devastatin’. Having to call somebody and say, “I’m going to be a month late on payments for cars and mortgages.” It’s awful.
Dupree uses local banks. He says, so far, they’ve given him some leeway. But he says friends who bank with national firms haven’t gotten much sympathy for what’s going on in the Gulf.
Dupree: There’s credit card companies out there that have no idea.
Steve Fritts is with the FDIC, one of the agencies who issued the statement to local and national banks.
Steve Fritts: We suggested the need for banks to recognize the economic circumstances their customers are facing.
…And to consider waiving late fees, restructuring debts and easing credit terms for those hurt by the spill. Sounds nice. Just one catch.
Fritts: Well, there is no way to enforce it.
And as the mortgage crisis shows, just because the feds ask banks to work with customers, doesn’t mean they will.
But Alex Sanchez, with the Florida Bankers Association, says his members have an incentive to help their customers — they need their business in the long run.
Alex Sanchez: But we need the regulators’ help, because remember, when these businesses fall behind on their loans, that threatens the banks in the Panhandle.
Regulators say they’ll consider the spill’s “unusual circumstances” when they look at the books of banks doing business in the Gulf. But those tighter standards put in place since the financial crisis? Even in the Gulf, they still apply.
I’m Krissy Clark, for Marketplace.
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