Damage from Mississippi storms spurs guidance for regulatory relief on recovery actions by local banks

Extending repayment terms, restructuring existing loans, or easing terms for new loans using sound banking practices are among techniques recommended for Mississippi banks by the federal insurer of bank deposits as they respond to customers affected by tornadoes and severe storms in the state.

The Federal Deposit Insurance Corp. (FDIC), in a financial institution letter (FIL-47-2020) Tuesday, made the recommendations. The letter notes that a federal disaster for selected areas affected in Mississippi was declared on April 16, 2020. Additional designations may be made after damage assessments are completed in the affected areas, the agency said.

Damage was sustained to the state during April 12 storms that included tornadoes, straight-line winds and flooding causing “significant property damage.”

“The FDIC is encouraging banks to work constructively with borrowers experiencing difficulties beyond their control because of damage caused by the severe weather,” the agency said in its letter. “Banks may receive favorable Community Reinvestment Act (CRA) consideration for community development loans, investments, and services in support of disaster recovery.

Guidance to Help Financial Institutions and Facilitate Recovery in Areas of Mississippi Affected by Severe Storms, Tornadoes, Straight-Line Winds and Flooding