Getting in front of bad news: what do you say to your customers when there is negative information involving your bank? Saying nothing about the receipt of a 'cease and desist' order, for example, is not an option.

• Author: Evert, Cindy Cofer
• Position: Crisis Communication

In today's weak economy, there is plenty of bad news going around. An example is when a bank is a recipient of a regulatory order or action, such as from the FDIC.

If your financial institution is the focal point of negative news--such as the receipt of a cease and desist order--do you know how to reassure your customers and your community? How do you handle the situation?

The public has been reading a lot about the banking crisis in recent months. There is a vast range of emotions that consumers have about this situation: concern, doubt, disbelief, fear, mistrust and anger to name a few. These emotions are only compounded when customers learn about regulatory action involving their bank or another bank located in their community.

If a bank receiving a regulatory action wishes to protect its image and preserve its valued relationship with its customers, it needs to address all of these negative emotions through the use of effective communication.

If you are like most banks, you work tirelessly to build relationships with your customers. You train your staff, you talk about relationships at every team meeting, you spotlight relationships in your marketing materials, and you truly believe that your ability to create mutually beneficial relationships will separate you from your competition ... right? It's all about relationships.

When it comes to successful, long-term relationships, what is the most important factor? Whether we're talking personal or professional, the answer is "communication." Communication is at the foundation of any successful relationship; in good times and in bad; in sickness and in health.

What about lack of communication? What does that say about a financial institution's integrity? If you're a parent, you've probably told your children, "If something happens, I want to hear it from you, before I hear it from others," It's all about integrity, trust, honesty, communication and preserving the relationship.

There's a rule of communication that I learned many years ago: "The burden of communication lies with the party that has the most to lose."

Why don't some organizations want to communicate when they are going through difficult times? Perhaps they rationalize that there is no need to draw attention to negative news. It's the ostrich approach--sticking their head in the sand, hoping that no one will notice. Sadly, there are few secrets in the world of banking today. Attention is drawn to our industry whether we like it or not. Newspapers and other media outlets carefully watch for the latest information on banks-in-crisis like vultures circling an injured animal.

They love to create lists of banks: "High Concentration in Commercial Real Estate," "Low Capital Ratios," "Delinquent Loans as a Percentage of Assets," "Falling Profits," and "Reserves on Noncurrent Loans." There are even lists of "Banks on the Edge" and "Banks Predicted to Fail." Clearly, these lists are rarely based on positive criteria. We are working in a bruised and battered industry.

There is more to your bank's story than a single indicator or ratio or percentage. Is this the only message you want your employees, customers and marketplace to hear? If you don't tell your story, someone else will ... and the tone and details will be at their discretion--not yours.

The message

When you are evaluating your communication options, think like your audience. Ask yourself: What would you want to hear from a trusted resource, a financial partner, when there is difficult news to share?

* How is the business doing today? Is the business going to be OK?

* Does the business have a plan in place? Is my money/investment safe?

* Are the employees going to keep their jobs?

Our message needs to convey:

* An acknowledgement and an explanation of our situation.

* Confidence in our abilities to navigate through these difficult times.

* Our plans for the future.

* A long-term commitment to our customers and our community.

Do we have to share all the details? As our mothers told us, be truthful, but you don't have to tell everything you know. Provide an appropriate overview of your...