Federal financial regulators, including the National Credit Union Administration, pledged this week to provide regulatory flexibility to financial institutions affected by Hurricane Ida and California wildfires.
“In supervising institutions affected by Hurricane Ida, the agencies will consider the unusual circumstances these institutions face,” the regulators said, in joint statements issued during the past two days. For instance, the regulators said that examiners will not sanction institutions that alter or adjust terms on existing loans for people affected by the storm.
Ida made landfall in Louisiana as a Category 4 hurricane and was downgraded to a tropical storm as it moved into Mississippi on Monday, while the wildfires continue to burn in California.
The regulators said that institutions should individually evaluate modifications of existing loans to determine whether they represent troubled debt restructurings under generally accepted accounting principles.
The agencies also pledged to expedite requests for financial institutions to temporarily relocate their operations due to staffing, power, and telecommunications challenges. They added that the agencies will be flexible with requirements that financial institutions publicize branch closings or relocations.
“The agencies do not expect to assess penalties or take other supervisory action against institutions that take reasonable and prudent steps to comply with the agencies’ regulatory reporting requirements if those institutions are unable to fully satisfy those requirements” because of the hurricane and wildfires, they added.