U.S. Financial Regulators Issue Joint Statement on Gulf Oil Spill
Federal financial regulators, along with the Conference of State Bank Supervisors, urged financial institutions to work with customers affected by the BP oil spill in the Gulf of Mexico.
In a July 14 joint statement, the regulators noted that "efforts taken by financial institutions to work with their borrowers and customers in affected communities, if conducted in a reasonable and prudent manner, are consistent with safe and sound banking practice."
Devising ways to ease the difficulty
The ruptured oil well that began gushing crude oil into the Gulf of Mexico in late April has caused significant disruptions to business activity along the Gulf coast. Regulators, including the Federal Reserve, encouraged financial institutions to consider several measures that could help customers who have been affected financially, which could better position them to repay their debts. The joint statement includes the following measures:
- Temporarily waiving fees associated with late payments, ATM withdrawals, and early savings withdrawals
- Expediting lending decisions, when possible and consistent with safety and soundness
- Extending or restructuring loans in anticipation of funds received from claims filed with BP
- Easing credit terms and fees on loans to creditworthy borrowers
Regulators will weigh circumstances
"These efforts can contribute to the health of the local community and the long-term interests of the institution and its customers," the regulators said. While highlighting the need for financial institutions to work with borrowers affected by the disaster, the regulators also emphasized the importance of preserving existing loan-grading methodologies and maintaining accrual status and reserves on affected loans.
For their part, bank examiners "will consider the unusual circumstances banks and credit unions in affected areas may have with respect to safety-and-soundness issues in determining the appropriate supervisory response."
Issuing the statement along with the Federal Reserve and the Federal Deposit Insurance Corporation were the Office of Thrift Supervision, the Office of the Comptroller of the Currency, and the National Credit Union Administration.
July 29, 2010