Banks and credit unions across the United States have run low on cash as the coronavirus pandemic prompts customers to make unexpectedly big cash withdrawals.
As covid-19 worries cause large numbers of customers to withdraw huge amounts of cash at the same time, banks and regulators are beginning to fear a bank run.
The withdrawals, sometimes reaching $100,000 or more, appear to be motivated by a financial market made tumultuous by the coronavirus.
Some banks have imposed withdrawal restrictions, while regulators warn consumers that keeping large amounts of cash can be risky, since it is more susceptible to loss by fire, flood, or theft.
Officials also pointed out that deposits at a bank or federally insured credit union are backed by the government up to $250,000.
Government regulators and bank officials are preparing for various contingencies, with the Federal Reserve taking steps to maintain liquidity in the system.
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Facing the rush for cash
There have been reports about JPMorgan Chase customers at a midtown Manhattan branch stockpiling cash, and customers in the Hamptons making requests to withdraw large amounts of cash.
Berkshire Bank in Boston said it had increased daily spending limits on debit cards for consumer and small business customers and had waived penalties on early withdrawals from CDs up to $20,000, according to a company release.
A spokesman for London-based HSBC said the bank, which operates globally with retail branches in the U.S., had not seen any change in cash withdrawal patterns.
David Tente, executive director of the ATM Industry Association for the U.S., Canada and the Americas, said he had not heard any reports of consumers rushing for cash, but acknowledged that such a need could arise.
“It would not be unusual in times of crisis to see that happen — people are going to rely on cash if they are concerned about being able to purchase what they need,” he said.
UK keeping an eye on situation
A spokesperson for UK Finance, a trade association that represents the banking and financial services industry in Great Britain, said it had not seen any rush for cash withdrawals.
However, officials said the UK cash industry had contingency plans in place to deal with a range of scenarios and was closely monitoring developments.