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Financial Institution Letters
Supervisory Practices Regarding Depository Institutions and Borrowers in Areas Affected by Hurricane Gustav in Alabama, Mississippi, Louisiana and Texas
The Federal Deposit Insurance Corporation (FDIC) recognizes the serious impact of the recent hurricane in certain parts of Alabama, Mississippi, Louisiana and Texas on the operations of financial institutions and will provide regulatory assistance to institutions subject to its supervision. These initiatives are being taken to provide regulatory relief and facilitate recovery. The FDIC encourages depository institutions in the declared disaster areas to meet the financial service needs of their communities.
The affected areas in Texas are the following counties: Angelina, Aransas, Austin, Bee, Bexar, Bowie, Brazoria, Brazos, Brooks, Calhoun, Cameron, Chambers, Collin, Colorado, Dallas, Denton, DeWitt, El Paso, Fort Bend, Galveston, Goliad, Hardin, Harris, Hidalgo, Jackson, Jasper, Jefferson, Jim Hogg, Jim Wells, Kenedy, Kleberg, Lavaca, Liberty, Lubbock, Matagorda, Montgomery, Nacogdoches, Navarro, Newton, Nueces, Orange, Polk, Potter, Refugio, Sabine, San Jacinto, San Patricio, Shelby, Smith, Starr, Tarrant, Tom Green, Travis, Trinity, Tyler, Victoria, Waller, Walker, Webb, Wharton and Willacy.
Lending. Bankers should work constructively with borrowers in communities affected by the hurricane. The FDIC realizes that the effects on local businesses and individuals are often transitory, and that prudent efforts to adjust or alter terms on existing loans in areas affected by the hurricane should not be subject to examiner criticism. In supervising institutions impacted by the disasters, the FDIC will take into consideration the unusual circumstances the institutions face. The agency recognizes that efforts to work with borrowers in communities under stress can be consistent with safe and sound banking practices as well as in the public interest.
Investments. Bankers should monitor municipal securities and loans affected by the hurricane. The FDIC realizes that local government projects may be negatively impacted. Appropriate monitoring and prudent efforts to stabilize such investments are encouraged.
Reporting Requirements. FDIC-supervised institutions operating in declared disaster areas should notify their FDIC regional office if they expect a delay in filing their Reports of Income and Condition (Call Reports) or other reports. The FDIC will take into consideration any causes beyond the control of a reporting institution in determining an acceptable filing delay.
Publishing Requirements. The FDIC understands that the damage caused by the recent hurricane may affect compliance with publishing and other requirements for branch closings, relocations and temporary facilities under various laws and regulations. Banks that have disaster- related difficulties in complying with any publishing or other requirements should contact their respective FDIC regional office.
Consumer Laws. Regarding consumer loans, Regulation Z provides consumers an option to waive or modify the three-day rescission period when a "bona fide personal financial emergency" exists. To exercise this option, the consumer must provide the lender with a statement describing the emergency in accordance with the regulation.
Temporary Banking Facilities. The Atlanta and Dallas Regional Offices will expedite any request to operate temporary bank facilities by an institution whose offices have been damaged or that desires to provide more convenient availability of services to those affected by the disaster. In most cases, a telephone notice to the regional office will suffice initially, and necessary written notification can be submitted later.
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