Interagency Statement on Supervisory Practices Regarding Financial Institutions Affected by Tornadoes in Tennessee

  • Source: occ.gov

Treliant Takeaway:

Treliant knows business continuity.  If you need assistance with assessing and managing your disaster recovery risk, or determining the impact of this guidance on your firm’s activities, Treliant can help.

Article Highlights:

On March 12, 2020, the Board of Governors of the Federal Reserve System (FRB), the Conference of State Bank Supervisors (CSBS), the Federal Deposit Insurance Corporation (FDIC), the National Credit Union Administration (NCUA), and the Office of the Comptroller of the Currency (OCC, jointly Agencies) issued an interagency statement on supervisory practices regarding financial institutions affected by the recent tornadoes and severe weather events in Tennessee. The Agencies encourage institutions to meet the financial services needs of the affected areas and note the Agencies will provide appropriate regulatory assistance to affected institutions that they supervise.

The Agencies encouraged financial institutions to particularly consider:

  1. Working constructively with affected borrowers. Recognizing that efforts to work with borrowers in communities under stress is in the public interest and can be consistent with safe and sound banking practices, examiners should not criticize prudent efforts to modify terms on existing loans in the affected areas.
  2. Monitoring municipal securities and loans in affected areas. Since local government projects may be adversely affected by the storm damage, institutions should monitor municipal exposures in their portfolios and take prudent steps to stabilize such investments where appropriate.

To assist institutions in the affected areas, the agencies are prepared to offer regulatory relief when required:

  1. Temporary facilities. The Agencies will expedite requests to operate temporary facilities to provide more convenient services to affected communities. In many cases, a telephone notice to the primary state and/or federal regulatory will be sufficient to begin the approval process if followed by required written notifications.
  2. Publishing requirements. The Agencies understand tornado damage may affect compliance with publishing and related requirements related to branch closings, temporary facilities, and relocations. Financial institutions experiencing difficulties should contact their primary federal and/or state regulator.
  3. Reporting requirements. If an affected institution expects to encounter difficulty meeting reporting requirements, the institution should contact their primary regulator.

The Agencies remind institutions that they may receive Community Reinvestment Act consideration for community development loans, investments, or services that revitalize or stabilize federal disaster areas in their assessment areas or the states or regions that includes their assessment areas.

For more information, the Agencies refer institutions to previously issued guidance, which is available at the following links:

A list of the affected areas can be found at the Federal Emergency Management Agency.

Author

Lynn Woosley

Lynn Woosley is a Senior Director with Treliant.  She is a seasoned executive with extensive risk management experience in regulatory compliance, consumer and commercial credit risk, credit and compliance risk modeling, model governance, regulatory change management, acquisition due diligence, and operational risk in both financial services and regulatory environments.