The Federal Deposit Insurance Corporation issued supervisory guidance setting out regulatory relief to support FDIC-supervised financial institutions operating in specified Kentucky counties affected by severe storms, straight-line winds, tornadoes, flooding, landslides, and mudslides. The guidance encourages institutions to work constructively with affected borrowers and states that examiners will not criticize prudent efforts to adjust loan terms, restructure existing loans, or ease terms on new loans when consistent with safe-and-sound banking practices. The update notes that the Federal Emergency Management Agency declared a federal disaster for selected affected areas in Kentucky on April 24, 2025, with additional designations possible after damage assessments. It also highlights potential favorable Community Reinvestment Act consideration for community development loans, investments, and services that support disaster recovery in federally designated disaster areas, and outlines operational flexibilities including case-by-case regulatory relief for certain filing and publishing requirements, reporting delays for Reports of Income and Condition and other reports, and expedited approval for temporary banking facilities. Additional reminders cover monitoring municipal exposures in affected areas, the Regulation Z option to waive or modify the three-day rescission period for principal dwelling-secured loans in a bona fide personal financial emergency, and the need to evaluate loan modifications under applicable accounting standards (including ASC Subtopic 310-10 as amended by ASU 2022-02 and ASC Topic 326) based on borrower-specific facts and circumstances. FEMA may expand the set of designated areas as assessments continue, and the FDIC directs institutions experiencing disaster-related reporting or notice constraints to engage with the Chicago Regional Office, including for expedited processing of temporary facility requests.

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