Federal Deposit Insurance Corporation outlines supervisory relief for FDIC-supervised institutions supporting disaster recovery in Minnesota’s Leech Lake Indian Reservation

The Federal Deposit Insurance Corporation has issued supervisory guidance setting out regulatory relief measures for FDIC-supervised financial institutions to help support customers and facilitate recovery in the Leech Lake Indian Reservation in Minnesota, following severe storms and straight-line winds and a subsequent federal disaster declaration. The guidance encourages banks to work constructively with affected borrowers and indicates the FDIC will not criticize prudent loan term extensions, restructurings, or eased terms on new credit when consistent with safe-and-sound banking practices. It also notes that qualifying community development loans, investments, and services supporting disaster recovery may receive favorable Community Reinvestment Act consideration, and encourages institutions to monitor exposures to affected-area municipal securities and loans. Operationally, the FDIC will consider relief from certain reporting, filing, and publishing requirements, including for institutions expecting delays in submitting Reports of Income and Condition, and will expedite requests to operate temporary banking facilities where offices are damaged or to improve service availability. The guidance also highlights that, for principal dwelling-secured loans, Regulation Z allows consumers to waive or modify the three-day rescission period in the event of a bona fide personal financial emergency, subject to the regulation’s documentation requirements. Institutions seeking flexibility on reporting timelines, publishing requirements related to branch actions, or approval to operate temporary facilities are directed to coordinate with the FDIC’s Kansas City Regional Office. FEMA may make additional disaster-area designations after damage assessments are completed.