Cash demand doubled for Fed in hurricane-hit Florida

Investing and Transactions Reuters

Property damage is seen at a mobile home park after Hurricane Irma in Naples, Florida, U.S., September 11, 2017. (REUTERS/Stephen Yang)

U.S. lenders in the path of Hurricane Irma scrambled to acquire twice as much cash as usual last week, a surge that left two Federal Reserve branches in Florida working around the clock to meet the demand before floods and power outages struck.

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The U.S. central bank’s offices in Miami and Jacksonville dispatched a bulked-up fleet of armored vehicles to pay out $2.9 billion to banks and credit unions in the region, twice their weekly average, according to officials overseeing the emergency response in the Atlanta Fed’s district.

“It absolutely doubled our normal day to day operations,” Mary Gelpi, director of the district’s cash function office, said from New Orleans. There was no need for cash to be trucked in from outside the state, as was the case for Louisiana after Hurricane Katrina marooned New Orleans in 2005.

Irma ripped through the U.S. southeast earlier this week, flooding cities and towns and killing at least 32 in Florida. Nearly 2 million U.S. homes and businesses remain without power.

While the floods did not threaten the Fed’s office just west of Miami, waters did approach the one in downtown Jacksonville though it did not take in water, Gelpi said. A handful of employees at each office stayed overnight as hours were extended to receive, prepare and send out cash orders.

There has not yet been a follow-on surge in cash demand, Gelpi said. “We saw the peak prior to the storm, and now the lull as people came back online and commerce is re-emerging.”

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Late last month, Hurricane Harvey caused more havoc for the Fed’s Houston branch, where cash deliveries were halted amid the flooding and emergency shipments were driven in from San Antonio and Dallas.

Reporting by Jonathan Spicer; Editing by Chizu Nomiyama
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