#California Wildfires Impact Financial Institutions#
Hot Topic Overview
Overview
California wildfires and straight-line winds have had a significant impact on financial institutions. Federal and state financial regulators have issued a cross-agency statement providing regulatory relief. The statement encourages financial institutions to meet the financial service needs of affected communities and to work constructively with impacted borrowers, including modifying loan terms. Regulators will consider the unusual circumstances faced by affected institutions and expedite approvals for temporary facilities. Additionally, regulators will consider difficulties in reporting requirements for affected institutions and encourage financial institutions to monitor municipal securities and loans in disaster areas.
Ace Hot Topic Analysis
Analysis
The impact of California wildfires and straight-line winds on financial institutions has raised concerns among federal and state financial regulators. To assist affected institutions, the California Department of Financial Protection and Innovation, the Federal Deposit Insurance Corporation, the Federal Reserve Board, the National Credit Union Administration, and the Office of the Comptroller of the Currency issued a joint statement pledging regulatory assistance. The statement encourages financial institutions to work with borrowers in affected areas and to support prudent adjustments or modifications to existing loan terms to help them through this difficult time. Regulators will also expedite requests for temporary facility operations, where appropriate, and take a lenient approach to institutions that are unable to fully comply with regulatory reporting requirements due to the disaster. In addition, financial institutions may receive Community Reinvestment Act (CRA) consideration for community development loans, investments, or services to revitalize or stabilize affected areas. Regulators also remind financial institutions that local government projects may be negatively impacted by the disaster and encourage them to exercise caution in stabilizing such investments.
Public Sentiment · Discussion Word Cloud
Public Sentiment
Discussion Word Cloud
Classic Views
Financial regulators will provide regulatory relief to financial institutions impacted by the California wildfires and straight-line winds, including easing approval requirements for loan modifications and operating temporary facilities.
Financial institutions are encouraged to work constructively with borrowers in impacted areas and to prudently adjust or modify existing loan terms.
Regulators will take into account the extraordinary circumstances facing impacted institutions and will not penalize institutions that are unable to fully meet regulatory reporting requirements due to the disaster.
Financial institutions may receive CRA consideration for community development loans, investments, or services to revitalize or stabilize disaster-affected areas.