Two Financial Institution Letters (FIL) issued Friday by the federal bank deposit insurer outline series of steps aimed at providing regulatory relief to banks in Alabama and Kentucky affected by severe storms, including straight-line winds and tornadoes in the first case and flooding and land/mud slides in the latter.
In each letter, the Federal Deposit Insurance Corp. (FDIC) says it is encouraging banks to work constructively with borrowers experiencing difficulties beyond their control because of damage caused by the severe weather. It notes that:
- Banks that extend repayment terms, restructure existing loans, or ease terms for new loans in a manner consistent with sound banking practices can contribute to the health of the local community and serve the long-term interests of the lending institution.
- Banks may receive favorable Community Reinvestment Act (CRA) consideration for community development loans, investments, and services in support of disaster recovery.
- The FDIC also will consider regulatory relief from certain filing and publishing requirements.