Federal Deposit Insurance Corporation announces supervisory relief for FDIC-supervised institutions in Kentucky counties hit by severe storms and tornadoes

The Federal Deposit Insurance Corporation issued guidance outlining supervisory and other regulatory relief intended to support FDIC-supervised financial institutions and facilitate recovery in Kentucky areas affected by severe storms, straight-line winds, and tornadoes. The relief applies to all FDIC-supervised institutions and focuses on the federally designated disaster areas in Caldwell, Laurel, Pulaski, Russell, Trigg, and Union Counties. The measures encourage banks to work constructively with affected borrowers, with the FDIC indicating it will not criticize prudent loan term adjustments, restructurings, or new lending consistent with safe-and-sound practices, while noting that loan modifications should be evaluated under applicable accounting standards. Institutions may also receive favorable Community Reinvestment Act consideration for qualifying community development loans, investments, and services that revitalize or stabilize federally designated disaster areas. Additional relief includes FDIC consideration of delays in regulatory reporting where causes are beyond the institution’s control, flexibility where disaster impacts publishing and other requirements for branch actions and temporary facilities, and expedited processing for temporary banking facilities, typically starting with telephone notice to the Chicago Regional Office. The guidance also highlights that Regulation Z permits modification or waiver of the three-day rescission period for principal dwelling-secured loans in a bona fide personal financial emergency, subject to the consumer’s written statement.