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Our Response to the Coronavirus Pandemic

In the face of the coronavirus pandemic and corresponding shutdowns across the globe, financial markets and the broader economy have experienced significant stress and volatility. We at the FDIC have put in place a set of regulatory and banking supervision measures to mitigate the impact of the coronavirus pandemic on the U.S. financial system and to support American households, communities, and small businesses.

Encouraging banks to work with affected customers and communities

Just days after the World Health Organization formally declared a global pandemic, we issued a statement acknowledging that this unique and evolving situation could pose significant temporary business disruptions and challenges, and encouraging financial institutions to work with customers and communities affected by COVID-19. Specifically, we stated that an institution’s prudent efforts to modify the terms on existing loans for affected customers would not be subject to examiner criticism. We committed to working with affected financial institutions to reduce burden when scheduling examinations, including making greater use of off-site reviews, consistent with applicable legal and regulatory requirements.

Increasing flexibility for banks to meet the needs of their customers

We have encouraged banks to work with all borrowers, especially those from industry sectors particularly vulnerable to economic volatility. We have clarified that prudent efforts to modify the terms on existing loans for affected customers will not be subject to examiner criticism, and that certain loan modifications made in response to COVID-19 are not troubled debt restructurings (TDRs). We have also provided flexibility to enable mortgage servicers to work with struggling consumers and to allow for delayed receipt of required appraisals for certain residential and commercial real estate loans.

Fostering small business lending

The nation’s community banks have played an outsized role in pandemic-related government stimulus programs, like the Paycheck Protection Program, or PPP. As of the second quarter of 2020, community banks held approximately 31 percent of all PPP loans. We have supported banks’ participation in PPP by clarifying that loans issued under the PPP would get a zero risk weight for risk-based capital purposes and approving a rule to mitigate the impact of PPP lending on banks’ assessments.

Protecting consumers and increasing financial options

We have a variety of resources that offer consumers helpful information related to banking and COVID-19. We have also warned consumers of scams involving imposters pretending to be agency representatives to perpetrate fraudulent schemes. And, together with our fellow federal regulators, we have encouraged banks, savings associations, and credit unions to meet consumers’ needs by offering responsible small-dollar loans for consumer and small-business purposes.

Actively monitoring the financial system

We have moved all supervisory activities offsite to protect the health and safety of our employees and to provide flexibility to institutions responding to operational challenges brought on by the pandemic. Nevertheless, we have maintained our supervisory programs for both safety and soundness and consumer protection and continue to meet all associated statutory requirements and internal goals. We have expanded our risk-monitoring of financial institutions whose activities or concentrations may present additional concerns due to the economic consequences of the pandemic. And we have made available institution-specific and macroeconomic information, including assessments of aggregate banking industry vulnerabilities to credit and liquidity risk.