‘Prudent efforts’ to meet cash, financial needs of storm victims not subject to examiner reproach

Prudent efforts by depository institutions to meet customers’ cash and financial needs affected by Hurricane Irma — when consistent with safe and-sound banking practices — generally will not be subject to examiner criticism, the Federal Deposit Insurance Corp. said in a statement today.

The statement applies to FDIC-Supervised Banks (Commercial and Savings) in St. John and St. Thomas islands of the U.S. Virgin Islands, The Commonwealth of Puerto Rico, Florida, and Georgia.

“The FDIC encourages depository institutions to consider all reasonable and prudent steps to assist customers in communities affected by Hurricane Irma,” the federal deposit insurer said in a statement. “The FDIC recognizes efforts to work with borrowers in the affected communities can be consistent with safe-and-sound banking practices and in the public interest.”

The FDIC said “prudent efforts” may include:

  • Waiving ATM fees for customers and non-customers
  • Increasing ATM daily cash withdrawal limits
  • Waiving overdraft fees
  • Waiving early withdrawal penalties on time deposits
  • Waiving availability restrictions on insurance checks
  • Easing restrictions on cashing out-of-state and non-customer checks
  • Easing credit card limits and credit terms for new loans
  • Allowing loan customers to defer or skip some payments
  • Waiving late fees for credit card and other loan balances
  • Delaying the submission of delinquency notices to the credit bureaus

Modifications of existing loans are to be evaluated individually to determine whether they require financial reporting as troubled debt restructurings (TDRs), FDIC added. “This evaluation should be based on the facts and circumstances of each borrower and loan; this requires judgment since not all modifications are TDRs,” the agency stated.

The deposit insurer also noted that insured institutions may receive CRA consideration for community development loans, investments or services that revitalize or stabilize federally designated disaster areas in their assessment areas or in the states or regions that include their assessment areas.

The FDIC further encouraged depository institutions to be “reasonable” in their approach to verifying the identity of individuals temporarily displaced by Hurricane Irma. “Recognizing the urgency of this situation, the FDIC encourages depository institutions to use non-documentary verification methods permitted by the Customer Identification Program requirement of the Bank Secrecy Act for affected customers who cannot provide standard identification documents.”

The agency pointed out the its rules provide that verification of identity may be completed within a reasonable time after the account is opened. “A depository institution in an affected area, or dealing with new customers from the affected area, may amend its Customer Identification Program immediately and obtain required board approval for program changes as soon as practicable.”

Meeting the Financial Needs of Customers Affected by Hurricane Irma