Local banks provide relief during shutdown

Local banks recently assisted federal workers with aid during the government shutdown.

Two such banks were Jersey Shore State Bank and Luzerne Bank, according to Aron Carter, Senior Vice President of Enterprise Risk Management at Penns Woods Bancorp Inc. Penns Woods owns both Jersey Shore State Bank and Luzerne Bank.

Penns Woods received numerous requests for financial relief during the shutdown from its customers, notably from employees working in the Allenwood and Lewisburg prison. After these employees went to the Penn Woods offices to request aid, Penns Woods understood their situation and quickly took action.

“We provided relief because we knew (the government shutdown) wasn’t their fault, and they were still going to work and not getting paid,” Carter said.

Relief came in the form of existing loan modification, and loan deferment. This deferment lasted as long as the government shutdown was in place, after which the loan would resume its normal payment schedule without penalty to the loan recipient.

Locally, other banks took action as well. Woodlands Bank also extended loan deferments or loan modifications to their existing customers in addition to being more lenient in lending practices to new customers who may have needed a loan to get them or their families through the shutdown, according to Brian Brooking, vice president of mortgage and consumer lending of Woodlands Banks.

Brooking notes that while there was not a massive amount of people seeking aid or relief during the shutdown, there was a notable increase of people needing leniency. There were not lines out of the doors “but definitely more than we would see for deferments,” according to Brooking.

Financial relief for those effected by government shutdown is not new territory for Penns Woods. During the government shutdown of 2013, Penns Woods received similar requests for relief from federal workers. Carter recalls the company “sitting down as a group and saying we have to afford these people relief.”

Carter partially credits the ability to provide this aid with the size of Penns Woods. According to Carter, there are three tiers of banks: Large banks such as JP and Morgan or Wells Fargo, medium sized banks like PNC or M&T, and small banks. Small banks like Jersey Shore State Bank, Luzern or Woodlands Bank, serving northeastern and central Pennsylvania, deal with less than $5 billion in assets, classifies them as community banks. This classification affords them a smaller coverage area, and allows the bank to be more flexible with their customers providing that they are in good standing.

This smaller size also tasks them with more of a duty to “being close to and feel the pains of the folks in the area”, according to Carter.

While the government shutdown effected roughly 800,000 federal employees, Carter said the shutdown effected much more than the federal workers, but also businesses as well.

“Its also the unintended consequences too. Now we’re just talking about the federal employees. But what about the businesses that make lunches, where those federal workers go and spend money? What about the vendors that deliver water? We take that into consideration, too.”

Carter described a trickle-down effect, where businesses faced the possibility of closing their doors because the federal employees they rely on to keep them operational no longer had money to spend in their establishments.

“So, you can’t just look at one constituency and say ‘Oh, it only effects them.’ Oh, no, no, no. It effects the masses…So we’ve taken up a more holistic view instead of just serving federal employees,” said Carter.

To make the process of receiving aid easier, Carter described that there were not many hoops to jump through.

“We do it on a case by case basis. Someone comes in and says, ‘I’m having hardship,’ we sit down and talk with them, weigh out all the factors and decide on a path they can take. If you’re a customer and in good standing, we work with you,” said Carter.

Brooking describes that Woodlands Bank is “ready and willing” to assist its customers in financial duress due to circumstances out of their control.

“As a community bank, we work individually rather than create a blanket policy for people. We work with people individually to find the best solutions for their situations,” said Brooking.

Carter says Penns Wood plans to have the same policy for their customers.

“We could have shutdown, after shutdown, after shutdown, and we still would so the same thing. It’s just business as usual for us.