Since your primary federal regulator is the Federal Reserve, we recommend reviewing its guidance on “Supervisory Practices Regarding Banking Organizations and their Borrowers and Other Customers Affected by a Major Disaster or Emergency.” The guidance identifies several ways in which banks may meet their customers’ credit needs, such as by “easing credit terms for new loans.” The guidance also suggests that banks may “ease documentation requirements or credit-extension terms for new loans to affected bank customers, consistent with prudent banking practices.” In addition, banks may obtain waivers from the real estate appraisal regulations.
We are aware of at least one state program that may provide funding for special loan programs for customers affected by natural disasters. The Illinois State Treasurer’s Disaster Recovery Linked Deposit Program provides low interest rate loans for certain borrowers living in disaster areas. Borrowers must use a participating financial institution to receive loans through the program.
For resources related to our guidance, please see:
- Supervision and Regulation Letter SR 13-6, Supervisory Practices Regarding Banking Organizations and their Borrowers and Other Customers Affected by a Major Disaster or Emergency (March 29, 2013) (The section titled “Working with Borrowers and Other Customers” includes more guidance on loan programs.)
- Federal Reserve Business Resiliency Webpage (This is the FRB’s webpage compiling its communications in response to disasters.)