Financial Institution Compliance Issues in Puerto Rico Worsened by Hurricane Fiona
The Federal Deposit Insurance Corporation (FDIC) has announced a series of measures aimed at providing regulatory relief to financial institutions and facilitating recovery efforts in areas of Puerto Rico affected by Hurricane Fiona.
Background
Hurricane Fiona caused significant property damage in various parts of the island from September 17, 2022, and is still ongoing. The Federal Emergency Management Agency (FEMA) has declared a federal disaster for certain areas affected by the hurricane, with additional designations possible after damage assessments are completed.
Regulatory Relief Measures
The FDIC is encouraging banks to work constructively with borrowers experiencing difficulties due to Hurricane Fiona-related damage. Banks may consider:
- Extending repayment terms
- Restructuring existing loans
- Easing terms on new loans in a manner consistent with sound banking practices
Banks that extend such relief may also receive favorable Community Reinvestment Act (CRA) consideration for community development loans, investments, and services supporting disaster recovery efforts. The FDIC will also consider regulatory relief from certain filing and publishing requirements.
Affected Areas
A total of 62 municipalities in Puerto Rico have been affected by Hurricane Fiona, including:
- Adjuntas
- Aguas Buenas
- Aibonito
- Arroyo
- Barranquitas
- Bayamón
- Caguas
- Canóvanas
- Carolina
- Cataño
- Cayey
- Ceiba
- Ciales
- Cidra
- Coamo
- Comerío
- Corozal
- Dorado
- Fajardo
- Florida
- Guayama
- Guayanilla
- Guaynabo
- Gurabo
- Humacao
- Jayuya
- Juana Díaz
- Juncos
- Lares
- Las Piedras
- Luquillo
- Maricao
- Maunabo
- Morovis
- Naguabo
- Naranjito
- Orocovis
- Patillas
- Peñuelas
- Ponce
- Río Grande
- Salinas
- San Juan
- San Lorenzo
- Santa Isabel
- Toa Alta
- Toa Baja
- Trujillo Alto
- Utuado
- Vega Alta
- Vega Baja
- Vieques
- Villalba
- Yabucoa
- Yauco
Monitoring and Reporting Requirements
The FDIC is urging bankers to:
- Monitor municipal securities and loans affected by the hurricane
- Take prudent efforts to stabilize such investments
- Request temporary banking facilities or extensions on reporting requirements due to disaster-related difficulties
Consumer Relief Measures
For consumers’ principal dwelling-secured loans, Regulation Z provides an option to waive or modify the three-day rescission period when a “bona fide personal financial emergency” exists. Consumers must provide lenders with a statement describing the emergency in accordance with the regulation.
Conclusion
The FDIC is committed to providing regulatory relief and facilitating recovery efforts for financial institutions affected by Hurricane Fiona in Puerto Rico.