Guidance offers regulatory relief for Texas banks affected by summer storms

Facilitating recovery from late June severe storms and flooding in Texas — which caused significant property damage in some areas of the state and triggered a July 6 federal disaster declaration — is the aim of guidance issued Tuesday from the federal bank deposit insurance agency to financial institutions in the area.

According to the Federal Deposit Insurance Corp. (FDIC) in a Financial Institution Letter (FIL-37-2018), banks are encouraged to “work constructively with borrowers experiencing difficulties beyond their control because of damage caused by the severe weather.”

The agency said that banks may consider extending repayment terms, restructuring existing loans, or easing terms for new loans, and noted that doing so “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 FDIC said banks may receive favorable Community Reinvestment Act (CRA) consideration for community development loans, investments, and services in support of disaster recovery. Regulatory relief from certain filing and publishing requirements will also be considered, the agency said.

FIL-37-2018 Regulatory Relief: Guidance to Help Financial Institutions and Facilitate Recovery in Areas of Texas Affected by Severe Storms and Flooding