By Bryan Clagett
At times, current events can become so overwhelming that it’s easy to forget how much strength we have when we come together. But right now, America’s banks have an unprecedented opportunity to show the nation what we truly stand for—if we unite as an industry around the common good.
The devastation from hurricane Harvey is staggering on a fiscal and emotional level. Just look at the numbers.
This will likely be the costliest natural disaster in U.S. history, with a potential price tag of $190 billion, according to a preliminary estimate from AccuWeather. For perspective, this represents a 1% economic hit to the gross national product. The expense will come from both:
- Direct damages – like how much destruction floods cause to homes and businesses
- Indirect damages – like employees being out of work for months or years, if affected areas aren’t livable again in the short term
FEMA is braced for a least 450,000 people seeking Federal aid. Where Harvey hit hardest, 80% lack flood insurance. Again, for perspective, the area most impacted by flooding has a population of roughly 6 million people.
Houston may feel an economic impact for years to come.
Twelve years after Katrina, the population of New Orleans has yet to recover. The city now has about 90,000 fewer residents, down 18% from pre-storm levels. The number of jobs in the New Orleans metropolitan area is down nearly 10% in that same time period. Ironically, many of the people who left New Orleans after Katrina, ended up in Houston.
Aside from the loss of material items, impacted families are faced with immense hardships and uncertainty. Federal programs like FEMA are intended to supplement, not replace, insurance and other financial buffers against natural catastrophe. Much of the aid that people will need requires taking on debt in order to rebuild—a challenge since jobs are now distributed and incomes at risk.
Wealthy or poor, financial wellness just took a direct hit for thousands of families.
Those who have lost homes, belongings, property, and businesses to Hurricane Harvey are going to need substantial help beyond the government. Perhaps for years to come.
I’ve been part of the banking community since 1986 and I’ve seen many instances of financial institutions coming to the aid of victims of tragedy. But never in my history have I seen such a need as now.
Can the banking community be a voice of stability, strength, and recovery as we look to rebuild the lives and communities impacted by Harvey? I have no doubt. If you are reading this, rest assured that you play a critical role in keeping local economies vibrant and can impact, in many ways, the storm recovery efforts. Big banks, small banks, local banks, national banks—this industry must unify to address the rebuilding efforts, not for the reason of bolstering the bottom line, but because we are a critical cog in the economic wheel.
It’s also the right thing to do.
Our commitment as an industry must be long term.
Certainly there are immediate needs we can address and ways we can support those affected. However, it will be our long-term commitment and resolve that will have the most significant impact. It’s going to be a long road, but we’re needed—and we’re more than capable of unifying a progressive effort to assure a successful recovery.
These are divisive times in America. But now there is such an opportunity for America to come together. Businesses, religions, and races of all kind. Let there be good that can come from this. It’s time we show that we are the United States and United People of America. Let’s also show that we’re the United Bankers of America.
For more information on FEMA resources, crisis communications, and opportunities to support Hurricane Harvey relief efforts, visit ABA’s Hurricane Harvey page on aba.com.