Flooding in Kentucky has prompted the federal bank deposit insurer to offer regulatory relief to banks in the areas of the state affected by inundation, storms, and landslides and mudslides, the agency said Wednesday.
The affected areas in Kentucky are Breathitt, Clay, Knott, Letcher and Perry Counties, the agency said.
In a financial institution letter (FI-38-2022), the Federal Deposit Insurance Corp. (FDIC) said the impact of July 26 storms caused “significant property damage” in areas of the state. In response, the agency said, banks in those areas 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.
Those banks may also receive favorable Community Reinvestment Act (CRA) consideration for community development loans, investments, and services in support of disaster recovery, the agency said, adding that it will consider regulatory relief from certain filing and publishing requirements.
“The FDIC is encouraging banks to work constructively with borrowers experiencing difficulties beyond their control because of damage caused by the severe storms, flooding, landslides and mudslides,” the agency said.