September 1, 2005

Beyond the physical suffering.

Right now we are focused on the physical suffering caused by Katrina.

Monty Loree is talking about the financial problems a million people will have as their credit is ruined as they default on bill payments.

I heard someone on television last night talking about those who depend on government checks that they receive on the first of the month. Because Katrina came at the end of a month, many people who live from check to check were completely out of money when it hit. They cannot get to the new money they stood to receive today.

UPDATE: A reader emails:
I wonder if American Express, for example, would be willing to let people donate their accumulated Amex Points (I'm sure there are similar programs with some other cards) to hotel chains which agree to provide housing at a discount or even free. I'm thinking of Amex because, one, there are a lot of better-off people who use these cards all the time and have great backlogs of points which can be used for all sorts of items AND HOTEL STAYS (we have bunches of points, for example, which we have been banking for a vacation since I made the decision to stay home with my child and thus stopped consulting full-time--and traveling, using Amex). Remember, Amex runs a travel service utilized by MANY corporate travelers--and corporations have subcontracted travel services for business to Amex. Perhaps Amex could help coordinate with the many hotel chains with which it works (and has discount arrangements, even before you get to the points issue).

I'm not trying to put the finger on Amex, by the way; I know there are other similar programs. It's just that I'm more familiar with how that one works, and that I know that particular company works with other major corps.

Many consultants, business employees, and other road warriors are ALSO likely to have free-stays banked at various hotel chains, as well. I wonder if these could be donated, and if so, how people could go about this.

Finally, it's good for people to remember that MANY companies, on an ongoing basis, have charitable-giving matching-fund programs. MANY people don't know this ... so they might want to check with their company's benefit manager, or whatever. My husband works for a major corporation which has this program in place, and we are mostly going to donate through that avenue, just because of the dollar-for-dollar match.


Dave Schuler said...

Something to consider is that the people of New Orleans and the Gulf Coast affected by Katrina may have no access to their banks which are functioning little better than they are.

And we're not just talking about the poor, sick, and elderly here. Doctors, lawyers, engineers, and college professors who've fled the disaster are living off their credit cards and ATM cards right now. What happens when those stop working?

Monty Loree said...

dave schuler: along with that, for all of the people who are living in hotels in other cities, what happens when they can't afford the $100 per night rates on their credit cards?

are the hotels going to service these people for free?

Ann: Thanks!

Goesh said...

I read where an Indian tribe in central LA has opened their casino to refugees and have taken in 500 who they say can stay there for as long as needed and will care for them. I pick out two positives for every negative I come across in this disaster. The second positive is the fact that at least this tribe has forgiven the majority culture for past transgressions, the magnitude of which far surpass a hurricane.

PatCA said...

I read that the major car companies are forgiving the car payments for the duration. I'm sure other companies will, too. It will be another hurdle they must overcome, but a call to their creditors should be made once they get settled.

Joe Hogan said...

Regarding those on public assistance expecting payments today, Louisiana, like most states uses an Electronic Benefit Transfer (EBT) system. See their website here:

People should be able to access their benefits via their atm-like cards anywhere in the state. For those now in or going to Texas, it will be more difficult.

Akiva said...

The financial institutions maintain significant multi-site data centers and disaster recovery centers.

The banks, credit card networks and ATM networks are not going down from a single regional disaster.

It's also unlikely any major actual data centers were in New Orleans, they tend to be (intentionally) in out-of-the-way relatively safe locations rather than centered in major cities.

Further, this is also the case with most of the call centers and processing centers as well, though not for risk/recovery purposes (at least not primarily) but rather from cost of operation.

People will not be having problems accessing their accounts and credit and so forth, they'll be having problems when shutdown businesses aren't paying them and they're accounts empty out and/or credit runs out as they're trying to get by.

Dave Schuler said...

You're not following me, Akiva. What you're not putting into your bank account can't be drawn out. Not everyone does direct deposit. And not everyone will keep receiving their paychecks for the months until the city is opened for business again. And it's not just the poor we're talking about.

iocaste said...

it says that at least for home mortgages, delinquencies will not be recorded for affected areas.

leeontheroad said...

I think the Amex donations for any housign is a pretty good idea. It's already the case that you redeem Amex Membership reward points to donate to charities listed with Guidestar, which is somethig fo watchdog for non-profits.