The impact of Hurricane Florence Friday prompted federal and state bank and credit union regulators to issue a joint statement urging financial institutions they supervise in the affected areas to “meet the financial services needs of their communities” during the event.
The agencies also vowed to provide “provide appropriate regulatory assistance to affected institutions subject to their supervision.”
The statement, issued jointly by the Office of the Comptroller of the Currency (OCC), the Federal Reserve Board, the Federal Deposit Insurance Corp. (FDIC), and the National Credit Union Administration (NCUA), includes recommendations for financial institutions in the areas of lending, temporary facilities, publication of requirements (for things such as branch closings), regulatory reporting, Community Reinvestment Act (CRA) compliance, and investments.
Specifically, regarding each of those areas, the agencies wrote:
- Lending: Financial institutions should work constructively with borrowers in communities affected by Hurricane Florence. Prudent efforts to adjust or alter terms on existing loans in affected areas should not be subject to examiner criticism. Modifications of existing loans should be evaluated individually to determine whether they represent troubled debt restructurings. This evaluation should be based on the facts and circumstances of each borrower and loan, which requires judgment, as not all modifications will result in a troubled debt restructuring. In supervising institutions affected by Hurricane Florence, the agencies will consider the unusual circumstances these institutions face. The agencies recognize that efforts to work with borrowers in communities under stress can be consistent with safe-and-sound practices as well as in the public interest.
- Temporary Facilities: The agencies understand that many financial institutions may face staffing, power, telecommunications, and other challenges in re-opening facilities after Hurricane Florence. In cases in which operational challenges persist, the primary federal and/or state regulator will expedite, as appropriate, any request to operate temporary facilities to provide more convenient availability of services to those affected by Hurricane Florence. In most cases, a telephone notice to the primary federal and/or state regulator will suffice initially to start the approval process, with necessary written notification being submitted shortly thereafter.
- Publishing Requirements: The agencies understand that the damage caused by Hurricane Florence may affect compliance with publishing and other requirements for branch closings, relocations, and temporary facilities under various laws and regulations, as applicable. Institutions experiencing disaster-related difficulties in complying with any publishing or other requirements should contact their primary federal and/or state regulator.
- Regulatory Reporting Requirements: Institutions affected by Hurricane Florence that expect to encounter difficulty meeting the agencies’ reporting requirements should contact their primary federal and/or state regulator to discuss their situation. The agencies do not expect to assess penalties or take other supervisory action against institutions that take reasonable and prudent steps to comply with the agencies’ regulatory reporting requirements if those institutions are unable to fully satisfy those requirements because of the effects of Hurricane Florence. The agencies’ staffs stand ready to work with affected institutions that may be experiencing problems fulfilling their reporting responsibilities, taking into account each institution’s particular circumstances, including the status of its reporting and recordkeeping systems and the condition of its underlying financial records.
- Community Reinvestment Act (CRA): Financial institutions, as applicable, 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. For additional information, institutions should review the Interagency Questions and Answers Regarding Community Reinvestment at https://www.ffiec.gov/cra/qnadoc.htm. (Federal credit unions are not subject to CRA; some state-chartered credit unions may be in their individual states.)
- Investments: The agencies realize local government projects may be negatively affected by Hurricane Florence. Institutions should monitor municipal securities and loans affected by Hurricane Florence. Appropriate monitoring and prudent efforts to stabilize such investments are encouraged.