Regulatory relief is extended to financial institutions in Michigan affected by the recent severe storms and resulting flooding from a failed dam, the federal insurer of bank deposits said Thursday.
In a financial institution letter (FIL-70-2020), the Federal Deposit Insurance Corp. (FDIC) noted that the storms and flooding from May 16-22 caused significant property damage in areas of the state, and that a federal disaster for selected areas was declared July 9. Given that, the agency said it is encouraging banks to work constructively with borrowers experiencing difficulties beyond their control because of damage caused by the severe weather.
That includes, the agency said, extending repayment terms, restructuring existing loans, or easing terms for new loans. The agency said that, if done in a manner consistent with sound banking practices, those actions can contribute to the health of the local community and serve the long-term interests of the lending institution.
The FDIC also said banks may receive favorable Community Reinvestment Act (CRA) consideration for community development loans, investments, and services in support of disaster recovery. The agency also will consider regulatory relief from certain filing and publishing requirements, the FDIC said.