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Home > News & Events > Inactive Financial
Institution Letters |
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Inactive Financial Institution Letters |
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FIL-46-97 |
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The Federal Deposit Insurance Corporation has announced a series
of steps intended to facilitate the process of rebuilding the
areas damaged by flooding in Minnesota, North Dakota, and South
Dakota.
As noted in the attached guidelines, the FDIC is encouraging
state-chartered banks to work constructively with borrowers who
are experiencing difficulties due to conditions beyond their
control. The guidelines suggest that extending repayment terms,
restructuring existing loans or easing terms for new loans, if
done in a manner consistent with sound banking practices, can
both contribute to the health of the community and serve the
long-term interests of the lending institution. The guidelines
also address other types of regulatory relief.
For guidance on these and related matters, please contact your
appropriate FDIC Division of Supervision regional office or the
Kansas City Regional Office at (816) 234-8000.
Attachment: (below)
Distribution: FDIC-Supervised Banks in Minnesota, North Dakota,
and South Dakota
NOTE: Paper copies of FDIC financial institution letters may be
obtained through the FDIC's Public Information Center, 801 17th
St., N.W., Room 100, Washington, D.C. 20434 (800-276-6003 or
(703) 562-2200).
DEPOSITORY INSTITUTIONS AND BORROWERS AFFECTED BY FLOODING
The Federal Deposit Insurance Corporation recognizes the
serious impact of flooding in Minnesota, North Dakota, and
South Dakota 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 affected disaster
areas to meet the financial service needs of their
communities.
Lending. Bankers should work constructively with borrowers
in communities affected by the flooding. The agency
realizes that the effects of such natural disasters 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 flooding should not be subject to
examiner criticism. In supervising institutions impacted by
the disaster, the FDIC will take into consideration the
unusual circumstances they 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.
Reporting Requirements. FDIC-supervised institutions
affected by the flooding should notify their appropriate
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 considering
how long a delay in filing can be accepted.
Publishing Requirements. The FDIC understands that the
flooding may affect compliance with publishing and other
requirements for branch closings, relocations and temporary
facilities under various laws and regulations. Banks that
have flood-related difficulties complying with any
publishing or other requirements should contact their
appropriate 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.
For guidance on these and related matters, please contact
your appropriate FDIC Division of Supervision regional
office or the Kansas City Regional Office at (816) 234-8000.
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| Last Updated 07/16/1999 | communications@fdic.gov |
