August 31, 2017 / 8:00 PM / 2 years ago

Cash flowing again from Fed's flood-threatened Houston branch

(Reuters) - Cash has begun flowing again from the Federal Reserve’s steel and cement vault in Houston, heading for banks in the hurricane-ravaged region after several days of flooding halted armored-truck deliveries and stranded employees overnight.

The Federal Reserve Bank branch is pictured in Houston, Texas, U.S., August 30, 2017. REUTERS/Carlo Allegri

In the wake of Hurricane Harvey this week, water from a nearby bayou rose onto the property of the U.S. central bank’s office in downtown Houston but did not reach the building nor its vault, senior Fed officials said on Thursday.

The floods, which drenched the Gulf of Mexico coast and killed at least 35 people, marooned the Fed branch for a few days and stopped cash shipments just as demand surged from nearby lenders. The first private truck re-started deliveries on Wednesday, joining a fleet of others making emergency trips from the Fed’s San Antonio and Dallas offices to local banks that, in many cases, were not able to open this week.

Those backup branches are delivering “a very high” amount of cash now, said Robert Kaplan, president of the Dallas Fed region that oversees Houston, without giving a value. “Our job is to make sure that despite flooding and roads being shut down we re-route our logistics,” he told Reuters from Dallas.

At a 400-seat call center at the Dallas Fed, normally used to help people deposit federal benefit checks, the first of about 100 agents from the Federal Emergency Management Agency have arrived. FEMA had lacked space to field emergency calls from its facility in nearby Denton.

Dallas is one of the central bank’s 12 regional branches, supervising private lenders throughout Texas and parts of Louisiana and Oklahoma. Some 45 employees there are handling the surge in cash orders from lenders, especially near the coast, and Kaplan said he expects a “post-surge” as waters recede.

Thousands of Texans are still be rescued from floodwater after the storm shut roads and forced more than a million people to leave homes.

Fork lifts move more than $1 billion of dollar bills each week in and out of the Houston Fed’s vault, one of the central bank’s largest. Many of the 200 employees sheltered there for days this week, and one stranded worker from a neighboring TV station even stayed the night.

“If the rain had gone on at the pace it was, that might have been a different situation,” Kaplan said.

When Hurricane Katrina hammered New Orleans in 2005, the Atlanta Fed branch hired private armed trucks to deliver cash from Houston. And in 2012, lower Manhattan in New York lost power and flood waters came within blocks of the New York Fed when Hurricane Sandy hit, which in part prompted an expansion of backup market operations in Chicago.

“This crisis isn’t over yet,” said Kaplan, adding he will visit flood-ravaged Houston as soon as he is able.

So far, though, his branch has not had to roll out one contingency plan it used in past emergencies: turning its vault into a kennel for the cats and dogs of displaced employees.

Reporting by Jonathan Spicer and Ann Saphir; Editing by Chizu Nomiyama and David Chance

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below