Financial institutions advise Spokane residents against pulling cash during crisis

Along with consumers’ mad dash to buy all the toilet paper stores can stock, some Spokane residents have either called their financial institutions or chosen to withdraw cash as the stock market fluctuates and daily life gets more disrupted by the day.

But the need for cash withdrawals during the crisis has no basis in fact, said Jack Heath, president of Washington Trust Bank in Spokane. Unlike overextended banks that caused the Great Recession, the current financial crisis was caused by the reaction to the coronavirus outbreak, not a systemic banking problem.

“There is no reason to make a run on cash,” Heath said. “We’ve had a lot of inquiries about it. But we’ve assured our customers that there is no need to make a run on cash.”

Customers who are pulling cash are not emptying their accounts, he said. However, some of them have withdrawn cash to have on hand.

“There is a perception out there that there could be an issue with the credit or debit systems,” he said. “There is no validity to that concern. Putting it under your pillow at home is not safe. It’s more prudent to take it as you need it.”

As the stock market was having its worst day in 30 years, the New York Times reported last week that several customers at a Bank of America branch in Manhattan lined up to take cash out, sometimes tens of thousands of dollars at a time.

So many people sought huge sums that the bank branch, at 52nd Street and Park Avenue, temporarily ran out of $100 bills to fulfill large withdrawals, according to three people familiar with the branch’s operations. The shortage hit after a rash of requests for as much as $50,000, two people who witnessed the rush told the Times.

The problem was limited to large bills – the bank’s ATMs stayed stocked and customers with routine transactions were still able to take out cash. By Friday morning, the bank had refilled its supply of big bills, two of the people said.

But a similar scenario has not played out on a large scale in Spokane, Dan Hansen, spokesman for Spokane Teachers Credit Union, said in a prepared statement Monday.

“With so many ways to access your accounts, make transactions and pay your bills, there’s no reason you’ll need extra cash,” the statement said.

Hansen noted the credit union deposit accounts are federally insured up to $250,000. If someone loses a debit or credit card, those losses may be covered. “If your cash is lost or stolen, it can’t be replaced,” the statement said.

Numerica Credit Union also issued a statement Monday supporting the use of cards over cash. It also has waived fees at some ATMs and for making payments on Numerica loans by phone.

“Your money is considerably safer at Numerica compared to cash,” the statement said. “We are financially strong and stable, and we will continue to weather this storm together.”

Heath, of Washington Trust Bank, compared the current financial crisis to immediate fiscal impact just after 9/11. ,

“My advice to customers: If you are one of those customers who will be adversely affected, reach out to your financial institution,” Heath said. “Don’t panic. Communicate with your lender and know that banks are here to help you get through this financial crisis.”