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Financial Institution Letters
Meeting the Financial Needs of Customers Affected by Hurricane Sandy
The FDIC encourages depository institutions to consider all reasonable and prudent steps to assist customers in communities affected by Hurricane Sandy. The FDIC realizes that although the effects of natural disasters on local businesses and individuals can be devastating, they often are transitory. The FDIC recognizes efforts to work with borrowers in the affected communities can be consistent with safe-and-sound banking practices and in the public interest.Prudent Relief Efforts
Prudent efforts by depository institutions to meet customers’ cash and financial needs generally will not be subject to examiner criticism. When consistent with safe and-sound banking practices, these efforts may include:
Financial institutions should ensure that modifications of existing loans are evaluated individually to determine whether they require financial reporting as troubled debt restructurings (TDRs). This evaluation should be based on the facts and circumstances of each borrower and loan; this requires judgment since not all modifications are TDRs. Financial institutions should refer to the instructions for the Consolidated Reports of Condition and Income (for banks and savings associations); Accounting Standards Codification Subtopic 310-40, “Receivables – Troubled Debt Restructurings by Creditors;” and other supervisory guidance for the accounting and reporting of TDRs.
Financial institutions may receive CRA consideration for community development loans, investments or services that revitalize or stabilize federally designated disaster areas in their assessment areas or in the states or regions that include their assessment areas. For additional information, institutions should review the Interagency Questions and Answers Regarding Community Reinvestment at http://www.ffiec.gov/cra/pdf/2010-4903.pdf.
Under the Customer Identification Program requirement of the Bank Secrecy Act, depository institutions must obtain, at a minimum, an individual's name, address, date of birth, and taxpayer identification number or other acceptable identification number before opening an account. The FDIC encourages depository institutions to be reasonable in their approach to verifying the identity of individuals temporarily displaced by Hurricane Sandy.
Recognizing the urgency of this situation, the FDIC encourages depository institutions to use non-documentary verification methods permitted by the Customer Identification Program requirement of the Bank Secrecy Act for affected customers who cannot provide standard identification documents. Moreover, the regulation provides that verification of identity may be completed within a reasonable time after the account is opened. A depository institution in an affected area, or dealing with new customers from the affected area, may amend its Customer Identification Program immediately and obtain required board approval for program changes as soon as practicable.
The FDIC notes that the measures detailed above could help customers recover financial strength and contribute to the health of the local community and the long-term interests of depository institutions and their customers when undertaken in a prudent manner. The FDIC recognizes that the needs and situation of each financial institution and its community and customers are unique. The actions above may not be feasible or desirable for all depository institutions and many institutions may provide additional services from those identified.Monitoring
The FDIC will continue to closely monitor the situation and provide additional guidance, as required, to help address the needs of depository institutions and their customers. Institutions requiring assistance in dealing with customers affected by Hurricane Sandy should contact their primary supervisors.
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