The agencies comprising the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Hawaii Department of Commerce and Consumer Affairs’ Division of Financial Institutions, the National Credit Union Administration, and the Office of the Comptroller of the Currency recognize the significant impact of the recent Hawaii wildfires on both the customers and operations of numerous financial institutions. As a result, they will provide appropriate regulatory assistance to these affected institutions, within the scope of their supervision. Additionally, the agencies urge financial institutions operating in the affected areas to prioritize the financial service needs of their communities.
A comprehensive list of the disaster areas affected can be found at https://www.fema.gov/disasters.
Lending: The agencies encourage financial institutions to collaborate productively with borrowers in areas affected by the Hawaii wildfires. They fully support the practical efforts to modify or adjust the terms of existing loans in these affected areas, ensuring that such efforts will not be negatively assessed by examiners. Financial institutions should individually assess modifications made to existing loans to determine whether they constitute troubled debt restructurings or adjustments for borrowers experiencing financial difficulties, as applicable. When conducting this evaluation, institutions should consider the specific circumstances surrounding each borrower and modification. During the supervision of institutions affected by the Hawaii wildfires, the agencies will take into account the unique challenges faced by these institutions. They recognize that working with borrowers in communities experiencing stress can align with sound practices and be in the best interest of the public.
Temporary Facilities: The agencies understand that many financial institutions are facing challenges in reopening facilities after the Hawaii wildfires due to issues with staffing, power, telecommunications, and other aspects. To provide more convenient access to services for those impacted by the wildfires, the primary federal and/or state regulator will expedite any requests to operate temporary facilities, as necessary. In most cases, an initial telephone notice to the primary regulator will be sufficient to trigger the approval process, with the required written notification to follow shortly after.
Publishing Requirements: The agencies acknowledge that the damage caused by the Hawaii wildfires might impact compliance with publishing and other requirements for branch closures, relocations, and temporary facilities as stipulated by various laws and regulations. Institutions facing difficulties related to disaster in complying with publishing or other requirements are advised to contact their primary federal and/or state regulator.
Regulatory Reporting Requirements: Institutions affected by the Hawaii wildfires that anticipate difficulties in meeting the agencies’ reporting requirements should reach out to their primary federal and/or state regulator to discuss their circumstances. The agencies do not expect to impose penalties or other supervisory actions on institutions that take reasonable and prudent steps to adhere to the agencies’ regulatory reporting requirements but are unable to fully satisfy them due to the impact of the Hawaii wildfires.
The agencies’ staffs are prepared to collaborate with affected institutions facing challenges in fulfilling their reporting obligations. The specific circumstances of each institution, including the condition of its reporting and recordkeeping systems and the state of its underlying financial records, will be taken into account.
Community Reinvestment Act (CRA): Financial institutions may receive consideration under the CRA for loans, investments, or services that contribute to the revitalization or stabilization of federally designated disaster areas within their assessment areas or in the states or regions encompassing their assessment areas. Detailed information can be found in the Interagency Questions and Answers Regarding Community Reinvestment available at https://www.ffiec.gov/cra/qnadoc.htm.
Investments: Institutions are advised to closely monitor municipal securities and loans affected by the Hawaii wildfires. The agencies acknowledge that local government projects may experience negative effects from the disaster and encourage institutions to engage in appropriate monitoring and take prudent actions to stabilize their investments.
For further information, consult the Interagency Supervisory Examiner Guidance for Institutions Affected by a Major Disaster, available at the following links:
CSBS: https://www.csbs.org/interagency-supervisory-examiner-guidance-institutions-affected-major-disaster
FDIC: https://www.fdic.gov/news/news/financial/2017/fil17062.html
FRB: https://www.federalreserve.gov/supervisionreg/srletters/sr1714a1.pdf
NCUA: https://www.ncua.gov/regulation-supervision/letters-credit-unions-other-guidance/examiner-guidance-institutions-affected-major-disaster
OCC: https://www.occ.gov/news-issuances/bulletins/2017/bulletin-2017-61.html
Media Contacts:
DCCA – William Nhieu – (808) 586-7582
FDIC – LaJuan Williams-Young – (202) 898-3876
FRB – Meg Nelson – (202) 909-7653
NCUA – Joseph Adamoli – (703) 518-6330
OCC – Stephanie Collins – (202) 649-6870
Read the original Federal Reserve release here.
