Banks have regulatory flexibility to help communities facing disasters, emergencies, bureau reminds

Existing laws and regulations provide banks and other supervised entities regulatory flexibility to take certain actions that can benefit consumers in communities under stress from disasters or emergencies and hasten recovery, the consumer financial protection agency said in policy guidance issued Tuesday.

In a “statement on supervisory practices regarding financial institutions and consumers affected by a major disaster or emergency,” the Consumer Financial Protection Bureau (CFPB) said it would consider the impact of major disasters or emergencies on supervised entities themselves when conducting supervisory activities.

“Supervised entities can make use of existing regulatory flexibility where doing so would benefit consumers affected by a major disaster or emergency,” the bureau wrote in the statement.

The statement offers examples of flexibility under Regulations B (implementing the Equal Credit Opportunity Act, ECOA), X (Real Estate Settlement Procedures Act, RESPA), and Z (Truth in Lending Act, TILA).

On supervisory response, the CFPB said it recognizes that banks and other supervised entities “may themselves experience difficulties due to a major disaster or emergency.” The bureau said that, when conducting exams or other supervisory activities, it would consider the circumstances banks may face following a major disaster or emergency “and will be sensitive to good-faith efforts to assist consumers.”

Statement on Supervisory Practices Regarding Financial Institutions and Consumers Affected by a Major Disaster or Emergency