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The Coronavirus, Fed Rates, and Cybersecurity: What You Should Know

 

The past few weeks have been an unprecedented time across the globe. The spread of COVID-19 has proven just how connected we are as a global community. While the social distancing guidelines from the World Health Organization and the Center for Disease Control & Prevention ask us to keep a physical distance from one another, now is an important time to maintain that sense of community.

At Park Bank, we are committed to continuing to make a positive impact on our associates, our clients, and our community, even if we must do so at a physical distance.

We recognize that in these times of uncertainty, finances will remain top of mind for individuals and businesses alike. For specific information regarding how Park Bank is operating, click here. For COVID-19 resources for businesses, click here.

If COVID-19 has impacted you financially, please know that Park Bank is here to help provide you with support. Contact us and let us know your situation. We will work with you to create a solution that will bridge the gap between now and what’s next.


 

What is Park Bank doing about COVID-19?

Park Bank is committed to ensuring a seamless banking experience for our clients. President and CEO Jim Hegenbarth states, "As with the rest of the community, Park Bank is working through the challenges presented by the COVID-19 pandemic. I am extremely proud of the Park Bank team for their readiness and flexibility in responding to this challenge. Most of our internal support team is already working remotely to ensure ongoing operations, and our decision to reduce branch access was made to protect our associates and clients, while continuing to provide access to critical financial services. We are assessing the situation on an ongoing basis and will continue to provide updates accordingly."

Beginning on Monday, March 16th, all branches will be drive-through only, with the exception of our Capitol Square branch and our branch inside Meriter Hospital, which will be closed until further notice.

Additionally, per the advice from the World Health Organization, Park Bank associates will take additional measures to ensure the health and safety of our team and our clients, including frequent hand-washing, sanitizing workstations, and limiting physical contact, including handshakes.

We also encourage our clients to use online and mobile banking options. Park Bank’s First Vice President of Business Services Peter Benson points out, “We have tools that allow you to conduct your banking remotely,” allowing you to operate your finances in a way that keeps our community safe and healthy.

What does COVID-19 have to do with interest rates?

“The coronavirus has made its presence felt in the economy, as the Federal Reserve cut its benchmark interest rate to nearly zero in an unprecedented second emergency rate cut in two weeks. Additionally, the Fed is also purchasing $700 billion in Treasury and mortgage-backed securities,” states Bobbie Jorgensen, Vice President – Controller for Park Bank.

This rate decrease is an attempt to prevent a recession in response to market conditions experienced the past several weeks, similar to measures taken during the Great Recession.

According to Josh Marron, Chief Banking Officer of Park Bank, “It is important for our bankers and clients alike to understand that the Fed’s recent lowering of rates was done as a preemptive protective measure to combat any fear that the spread of coronavirus may be creating.  The Fed’s rate cut was done to ease any impacts, and to bolster confidence in the U.S. Economy.  Many economists see the Fed’s move to be a temporary boost to the financial markets, helping stabilize sentiment until the shock of coronavirus passes.”

What does the interest rate cut mean to me?

As a consumer, a rate cut may provide some great short-term benefits. Lower Fed rates sometimes translate to lower rates on loans, so whether you’re looking to make a purchase of a home, business, or vehicle, your rates may be favorable.

These lower rates also mean an increase in refinance activity, and this cut in particular seems to be creating an exceptionally large demand. If you are looking to refinance your home, you can expect that turnaround times may be slightly longer due to the high volume.

While a rate cut on the loan side means great rates for consumers, it also means lower rates on deposit accounts. If your deposit accounts have a variable rate, you may see that rate drop, at least in the short term.

Does the economic impact of COVID-19 affect the safety of my deposits?

The Independent Community Bankers of America (ICBA) and Park Bank remind community banking customers that their insured deposits are safe and backed by the full faith and credit of the federal government through the Federal Deposit Insurance Corp (FDIC).

“Community banks are stable and well-capitalized,” said ICBA President and CEO Rebeca Romero Rainey. “Community banking customers can continue to bank with confidence knowing their money is safe because it is insured by the FDIC. Since the FDIC was founded in 1933, no one has ever lost a penny of FDIC-insured funds.”

“The FDIC fully insures funds held in FDIC-insured community banks up to $250,000 per depositor,” said Jim Hegenbarth, President and CEO of Park Bank. “Our community bank is FDIC-insured, so we want our customers to know the facts and feel good about their decision to bank with us. We are here to answer any questions that our customers have and encourage them to reach out anytime.” 

Additionally, the Coronavirus Aid, Relief, and Economic Securities (CARES) Act recently signed into law provides additional assurances to bank clients as the law gives the FDIC authority to fully guarantee transaction account deposits.

It is important to note that unlike the relief efforts of the financial crisis in 2008, financial institutions are in a safe and sound position. This provision of the CARES Act was included to ensure ongoing consumer confidence in their bank and is not indicative of any threat to banks or the banking industry.

If you have questions about the FDIC coverage of your deposits with Park Bank, contact your banker and they can assist you.

What other impact might COVID-19 have?

Times of vulnerability like what we are seeing today with COVID-19 often lead to increases in cybersecurity risks. Attackers often take advantage of the media attention around events like the current COVID-19 situation, so it’s a good idea to be extra vigilant in keeping your information safe.

Additionally, with announcements that the government may be sending stimulus checks to Americans to help provide financial relief, there is concern that fraudsters will attempt to use these checks as a way to further gain access to your information.

“There is likely to be an increase in phishing attempts, with efforts to use the coronavirus to motivate people to comply with requests for information or funds. For example, there may be emails falsely claiming to be from the Center for Disease Control and Prevention, or from fake charitable organizations. Fraudsters may also claim to be with the government and request a fee to receive a stimulus check, or to get your personal information in order to issue the check,” according to Jeff Kurek, Vice President – Information & Cybersecurity.

Below are some measures you can take to protect yourself at all times, but are particularly important right now.

  • Do not click on links or open attachments included in unsolicited email.
  • Trust only information from legitimate, government websites for updates and information regarding COVID-19, in particular the Center for Disease Control and Prevention and the World Health Organization.
  • Do not disclose personal or financial information via email or respond to solicitations for this information.
  • Verify the authenticity of charitable organizations prior to making donations.
  • The government will never call or email you to ask for your personal information. 
  • The government will not ask you for an upfront fee to receive a stimulus check. 

For more information and updates about COVID-19, see the dedicated resources from the Center for Disease Control and Prevention and the World Health Organization.