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Financial Services Law Insights and Observations

FDIC encourages regulatory relief for California borrowers affected by wildfires

Federal Issues FDIC Disaster Relief Consumer Finance

Federal Issues

On August 28, the FDIC issued FIL-85-2020 to provide regulatory relief to financial institutions and help facilitate recovery in areas of California affected by wildfires that began on August 14. In the guidance, the FDIC notes that, in supervising institutions affected by the wildfires, the FDIC will consider the unusual circumstances those institutions face. The guidance suggests that institutions work with impacted borrowers to, among other things, (i) extend repayment terms; (ii) restructure existing loans; or (iii) ease terms for new loans to those affected by the severe weather, provided the measures are “done in a manner consistent with sound banking practices.” Additionally, the FDIC notes that institutions may receive Community Reinvestment Act consideration for community development loans, investments, and services in support of disaster recovery. The FDIC states it will also consider relief from certain reporting and publishing requirements.

Find continuing InfoBytes coverage on disaster relief guidance here.

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