FDIC urges SC banks to restructure loans, ease terms in wake of storm damage

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

The FDIC, in a financial institution letter (FIL-53-2020) Thursday, noted that a federal disaster for selected areas affected in South Carolina was declared May 1. 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 severe storms, tornadoes, and straight-line winds that caused “significant property damage,” it said.

“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 the FIL. “Banks may receive favorable Community Reinvestment Act (CRA) consideration for community development loans, investments, and services in support of disaster recovery.”

FDIC FIL-53-2020