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SUPERVISORY PRACTICES REGARDING DEPOSITORY INSTITUTIONS AND
BORROWERS AFFECTED BY SEVERE STORMS AND FLOODING IN KENTUCKY
The Federal Deposit Insurance Corporation (FDIC) recognizes the serious impact of the
recent severe storms, tornadoes, mudslides and flooding on the customers and operations of
financial institutions and will provide regulatory assistance to institutions subject to its
supervision. These initiatives will provide regulatory relief and facilitate recovery. The FDIC
encourages depository institutions in the affected areas to meet the financial services needs of
their communities.
Lending. Bankers should work constructively with borrowers in communities affected by the
disasters. The FDIC realizes the effects of natural disasters on local businesses and
individuals are often transitory, and prudent efforts to adjust or alter terms on existing loans
in affected areas should not be subject to examiner criticism. In supervising institutions
impacted by the disasters, the FDIC will consider the unusual circumstances they face. The
FDIC 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
disasters. 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 affected by the disasters should
notify their FDIC regional office if they expect a delay in filing their Reports of Income and
Condition or other reports. The FDIC will consider any causes beyond the reporting
institution's control when determining the length of an acceptable filing delay.
Publishing Requirements. The FDIC understands that the damage caused by the disasters
may affect compliance with publishing and other requirements for branch closings,
relocations, and temporary facilities under various laws and regulations. Banks experiencing
disaster-related difficulties in complying with any publishing or other requirements should
contact their FDIC regional office.
Consumer Laws. 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 Chicago Regional Office will expedite any request to
operate temporary banking facilities by an institution whose offices have been damaged or
that desires to provide more convenient availability of services to those affected by the
disasters. 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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