Extending repayment terms, restructuring existing loans, or easing terms for new loans are among the recommendations the Federal Deposit Insurance Corp. (FDIC) is making to banks in areas of Alabama affected by severe storms in March as guidance for dealing with the storms’ aftermath.
The storms, which included tornadoes, caused significant property damage in areas of Alabama (Calhoun, Cullman, and Etowah Counties) March 19-20, the FDIC said in a Friday release, prompting a federal disaster declaration for those areas late last month.
“The FDIC is encouraging banks to work constructively with borrowers experiencing difficulties beyond their control because of damage caused by the severe weather,” the FDIC said. “Extending repayment terms, restructuring existing loans, or easing terms for new loans, if done in a manner consistent with sound banking practices, can contribute to the health of the local community and serve the long-term interests of the lending institution.”
The federal deposit insurer noted that banks may receive favorable Community Reinvestment Act (CRA) consideration for community development loans, investments, and services in support of disaster recovery, and that the agency will also consider regulatory relief from certain filing and publishing requirements.
Additionally, the FDIC offered guidance in the areas of local investments, reporting requirements, publishing requirements, consumer laws and temporary banking facilities.