Areas of Maine, West Virginia, earn regulatory relief after storms, flooding, landslides, mudslides

Severe storms and flooding in Maine, and the same in West Virginia – plus landslides and mudslides – have spawned dual “regulatory relief” pronouncements for banks in the states Monday by the federal insurer of bank deposits.

According to the Federal Deposit Insurance Corp. (FDIC), the January declaration of a federal disaster in selected areas of West Virginia (in response to damage caused by storms in August), and the disaster declaration for certain areas of Maine also last month (in response to storms in mid-December) led to the regulatory relief statements.

The agency said, as a result of the statements, banks are encouraged to work constructively with borrowers “experiencing difficulties beyond their control because of damage caused by severe storms and flooding.” The agency said that banks extending repayment terms, restructuring existing loans, or easing 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.”

The agency said banks in the areas may receive favorable Community Reinvestment Act (CRA) consideration for community development loans, investments, and services in support of disaster recovery, and that it will also consider regulatory relief from certain filing and publishing requirements for banks in the affected areas.

Guidance to Help Financial Institutions and Facilitate Recovery in Areas of Maine Affected by Severe Storms and Flooding

Guidance to Help Financial Institutions and Facilitate Recovery in Areas of West Virginia Affected by Severe Storms, Flooding, Landslides, and Mudslides