Banks serving areas affected by the severe storms and straight-line winds and tornadoes in Tennessee the first half of December are being extended regulatory relief, including the prospect of Community Reinvestment Act (CRA) consideration, by the federal bank deposit insurer.
The Federal Deposit Insurance Corp. (FDIC) issued a Financial Institution Letter (FIL) Wednesday that outlines the relief available. In keeping with usual policy, the agency is encouraging institutions to work constructively with borrowers experiencing difficulties beyond their control because of the damage caused.
“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,” it said. It added that banks may receive favorable CRA consideration for community development loans, investments, and services in support of disaster recovery. Regulatory relief from certain filing and publishing requirements are also possible, the agency noted in the FIL.