Financial Institution Risk Management in Northern Mariana Islands Struggles to Recover from Super Typhoon Yutu

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The Federal Deposit Insurance Corporation (FDIC) has announced a series of measures aimed at providing regulatory relief and facilitating recovery for financial institutions affected by Super Typhoon Yutu, which devastated areas of the Northern Mariana Islands.

Regulatory Relief Extended to FDIC-Supervised Institutions

The FDIC is encouraging banks to work constructively with borrowers experiencing difficulties beyond their control due to damage caused by the severe weather. The agency believes that extending repayment terms, restructuring existing loans, or easing terms for new loans can contribute to the health of the local community and serve the long-term interests of lending institutions.

Community Reinvestment Act Consideration

Banks may receive favorable consideration under the Community Reinvestment Act (CRA) for community development loans, investments, and services that revitalize or stabilize federally designated disaster areas. The FDIC has issued guidelines for identifying community development activities and encourages financial institutions to contact their regional Community Affairs Officer for assistance.

Reporting and Publishing Requirements Waived

The agency will consider waiving reporting requirements and publishing deadlines for banks affected by the severe weather, allowing them more time to recover from the disaster. Institutions are encouraged to notify the San Francisco Regional Office if they expect a delay in filing reports or publishing information.

Consumer Laws Flexibility

Regulation Z provides consumers with an option to waive or modify the three-day rescission period when a “bona fide personal financial emergency” exists, such as damage caused by severe weather. Consumers must provide their lender with a statement describing the emergency in accordance with the regulation.

Temporary Banking Facilities Expedited

The FDIC will expedite requests to operate temporary banking facilities for institutions whose offices have been damaged or that desire to provide more convenient availability of services to those affected by the severe weather.

Financial Institution Letters

The FDIC has issued a Financial Institution Letter (FIL-69-2018) outlining these measures and providing guidance on how financial institutions can work with borrowers, investors, and regulators to facilitate recovery. The letter is available on the FDIC’s website at www.fdic.gov.