Notification Requirements for Closing Branches in Hurricane-Impacted Areas
FIL-95-2005 September 21, 2005
Section 42 of the Federal Deposit Insurance Act requires institutions to provide certain advance notifications to their federal regulator and customers before permanently closing a branch. However, the FDIC understands that the severe damage caused by Hurricane Katrina may affect institutions’ compliance with publishing and other requirements for branch closings.
Before an FDIC-insured financial institution can close a branch, Section 42 of the Federal Insurance Act requires it to:
Provide its federal regulator a 90-day advance notice of a proposed branch closing;
Mail to customers of that branch a notice at least 90 days before the scheduled closing; and
Place a conspicuous notice at the affected branch at least 30 days before the scheduled closing.
However, if a financial institution’s branch ceases operation because of an event beyond the institution’s control, the financial institution should inform its federal regulator and its customers, to the best of its ability, as soon as possible after making the decision to close an office.
Examples of methods to notify customers include posting a notice of the branch closing on the bank’s Web site, sending written notice of the branch closing to customers electronically or in monthly statements when able to do so, or contacting customers by phone.
FDIC-Supervised Banks (Commercial and Savings)
Acting Deputy Regional Director Gale Simons-Poole at firstname.lastname@example.org or 678-916-2200 (Alabama and Florida); Assistant Regional Director Cheryl Couch at email@example.com or 972-761-2070 (Louisiana); or Assistant Regional Director Patricia Lenfert at firstname.lastname@example.org or 901-821-5203 (Mississippi)