In March 2019, NCUA and federal and state banking agencies issued an interagency statement on supervisory practices regarding financial institutions affected by this year’s extensive flooding in the Midwest:

• Lending. Institutions should work constructively with borrowers in communities affected by flooding in the Midwest. Prudent efforts to adjust or alter terms on existing loans in affected areas should not be subject to examiner criticism.

Evaluate loan modifications individually to determine whether they represent troubled debt restructurings.

• Temporary facilities. The agencies understand that many financial institutions face staffing, power, telecommunications, and other challenges in re-opening facilities after the flooding in the Midwest.

In cases where operational challenges persist, the primary federal and/or state regulator will expedite, as appropriate, any request to operate temporary facilities to provide more convenient availability of services to those affected by flooding in the Midwest.

In most cases, a telephone notice to the primary federal and/or state regulator will suffice initially to start the approval process, with necessary written notification being submitted shortly thereafter.

• Regulatory reporting requirements. Institutions affected by flooding in the Midwest that expect to encounter difficulty meeting the agencies’ reporting requirements should contact their primary federal and/or state regulator to discuss their situation.

The agencies do not expect to assess penalties or take other supervisory action against institutions that take reasonable and prudent steps to comply with the regulatory reporting requirements if those institutions can’t fully satisfy those requirements due to the effects of flooding. 

• Investments. The agencies realize local government projects may be negatively affected by flooding in the Midwest. Institutions should monitor municipal securities and loans affected by this flooding.

Use appropriate monitoring and prudent efforts to stabilize such investments.

Click here for the full statement.

Refer to the “Interagency Supervisory Examiner Guidance for Institutions Affected by a Major Disaster” here [PDF].