TN banks urged to ease terms, restructure loans in wake of storm damage

Restructuring existing loans, extending repayment terms, or easing terms for new loans using sound banking practices are among techniques recommended for Tennessee banks by the Federal Deposit Insurance Corp. (FDIC) as the banks respond to customers affected by tornadoes and severe storms in the state.

In a financial institution letter (FIL-51-2020) Tuesday, the FDIC noted that a federal disaster for selected areas affected in Tennessee was declared on April 24. 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 12-13 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 Tennessee Affected by Severe Storms, Tornadoes, Straight-Line Winds and Flooding

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