Federal and state financial institution regulators teamed up Wednesday to issue a joint statement on supervisory practices regarding financial institutions affected by Hurricane Michael, which careened through the eastern Gulf Coast the same day. The statement covered six areas: lending, temporary facilities, publishing requirements, regulatory reporting requirements, Community Reinvestment Act (CRA), and investments.
The joint statement – issued by the Federal Reserve, the Federal Deposit Insurance Corp. (FDIC), the National Credit Union Administration (NCUA), the Office of the Comptroller of the Currency (OCC), and the Conference of State Bank Supervisors (CSBS) – noted that the regulators “recognize the serious impact of Hurricane Michael on the customers, members, and operations of many financial institutions and will provide appropriate regulatory assistance to affected institutions subject to their supervision.”
It added that they “encourage institutions operating in the affected areas to meet the financial services needs of their communities.”
The statement outlined six key areas that financial institutions should be addressing with their customers in the wake of the storm, which was quickly blowing through western Florida Wednesday afternoon to head north through Alabama, Georgia, and the Carolinas. The six areas are:
- Lending: Financial institutions should work constructively with borrowers in communities affected by storm; prudent efforts to adjust or alter terms on existing loans in affected areas should not be subject to examiner criticism.
- Temporary facilities: The agencies said they understand that “many financial institutions may face staffing, power, telecommunications, and other challenges in re-opening facilities” after the storm passes. “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 Michael.”
- Publishing requirements: The agencies said damage caused by the storm 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: 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 the storm. Institutions affected by Hurricane Michael should contact their primary federal and/or state regulator to discuss their situation.
- 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.
- Investments: The agencies said local government projects may be negatively affected by the storm; institutions should monitor municipal securities and loans affected by Hurricane Michael. Appropriate monitoring and prudent efforts to stabilize such investments are encouraged.