A series of steps intended to provide regulatory relief to financial institutions and facilitate recovery in areas of Puerto Rico affected by earthquakes were issued as guidance Friday by the federal insurer of bank deposits.
The Federal Deposit Insurance Corp. (FDIC), in a financial institution letter (FIL-4-2020) said its guidance notes that earthquakes jarring the island territory since late December “have caused significant property damage in areas of Puerto Rico.” The letter notes that a federal disaster for selected areas of the island was declared on Jan. 16 and that additional designations may be coming following damage assessments.
“The FDIC is encouraging banks to work constructively with borrowers experiencing difficulties beyond their control because of damage caused by the earthquakes,” the agency said.
Among the ways the FDIC suggested banks can work with borrowers included extending repayment terms, restructuring existing loans, or easing terms for new loans, done in a manner consistent with sound banking practices.
“Banks may receive favorable Community Reinvestment Act (CRA) consideration for community development loans, investments, and services in support of disaster recovery,” the agency added.