DOB: Bank and Credit Union Closings Due To Extreme Weather

Bank or Credit Union Closings
Due to Extreme Weather Conditions

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Whether a winter blizzard, ice storm or hurricane, New England weather at times can pose a danger to public safety, making travel very difficult. Storms that pass over Connecticut may be especially severe in some areas, but may spare other regions of the state.

As a result, the Department of Banking adopted a policy in 1992 that lets bank executives themselves decide if the weather conditions in their localities constitute an emergency that necessitates the closing of their bank offices. Prior to that, after assessing statewide conditions, the Banking Commissioner determined whether banks throughout Connecticut would close or remain open. Nevertheless, the Commissioner still retains authority to authorize banks to close. The full text of the department's policy follows.

Banks or Credit Unions:
While it is management's responsibility to decide whether or not to close due to extreme weather, you are required to immediately notify the Department of Banking of any decision to close offices. If immediate notification is not feasible due to the emergency, then you should notify the department as soon as possible. If such notification is by telephone [860.240.8169], it should be followed by written communication by email [dobclosures@ct.gov] or fax [860.240.8167].

Customers:
Contact your bank or credit union directly to determine if it will close or remain open during severe weather conditions. If conditions warrant the widespread closing of institutions, the Department of Banking may issue a news release to inform the public of the situation.


Department of Banking Policy
Closings Due To Extreme Weather Conditions

Weathercasters generally cannot predict, on any given day, how much snow can be expected in any particular area of Connecticut, or the direction and continued force of a hurricane. In the past, this has put the commissioner (who perforce relies on those weathercasters) at a distinct disadvantage. Banks have generally awaited the determination by this office that particular weather conditions constituted an "emergency" under Section 36a-23(g). Based on that determination, the commissioner would then authorize banks to close early. More often than not, the commissioner's authorization to close has been interpreted as mandatory, rather than permissive. This has led to banks closing in certain areas where the weather conditions were not so extreme as to threaten public safety, or to constitute an emergency.

In order to improve the efficiency and fairness of the emergency bank closing procedure, the Department of Banking is adopting a new approach to responding to extreme weather conditions. In essence, the responsibility of determining whether an "emergency" exists is being shifted, in most cases, from this Department to the management of each bank, which is in a much better position to make that determination. Each bank is encouraged to assess the weather conditions in its market area and to determine whether those conditions have affected operations and public safety to such an extent that it constitutes an "emergency.' If so, the bank would then determine that it would be in the best interest of the bank's customers and employees to close the bank, or any offices of the bank, pursuant to Section 36a-23(d).

Any bank that decides to close because of emergency conditions must immediately notify the Department of Banking, or, if immediate notification is not feasible because of the emergency conditions, then the bank should notify the Department as soon as possible. If such notification is by telephone, it should be followed by written communication either by fax or by mail. Any such closing would be considered a legal holiday under Section 36a-23(e).

The Department of Banking will continue to monitor weather conditions as best it can. If the situation arises where it is quite obvious that extreme weather conditions constituting an emergency will most likely require a significant number of Connecticut banks to close in order to protect the public safety, the commissioner may still use his power to authorize banks located in affected areas to close. If the commissioner does authorize banks to close, that would relieve any bank that had determined it should close of the necessity of notifying the Department of its closing. It would not, however, relieve the bank of the responsibility of determining whether an emergency condition exists for that bank, affecting the safety of its customers and employees.

If the Department learns that some banks expect to close, it will notify the media and ask them to encourage bank customers to call their bank before visiting, as some banks may close in light of extreme weather conditions.

The intent of this change in approach is to improve each bank's ability to react, in the most responsible way, to the conditions affecting its own offices. This should improve the public's position as it may increase the number of banks able to provide services during questionable weather while it should continue to protect the public safety most effectively at every location throughout the state.

Adopted: January 17, 1992


Financial Institutions Division