FDIC Encourages Financial Institutions to Support Borrowers During Market Volatility

The FDIC encouraged financial institutions to support borrowers who are vulnerable to current market volatility. In a statement, the FDIC offered recommendations to financial institutions on how they can lessen burdens on affected borrowers, including:

• Working with customers. The FDIC recommended that financial institutions accommodate borrowers as needed by (i) allowing certain fee waivers, (ii) increasing ATM daily cash withdrawal limits and credit limits for creditworthy borrowers, (iii) easing restrictions for cashing out-of-state and non-customer checks, and (iv) providing payment options, particularly for customers that are currently unable to work.

• Lending. The FDIC stated that financial institutions should modify - when appropriate - borrowers' debt obligations. The FDIC encouraged financial institutions to (i) evaluate whether loan modification represents a troubled debt restructurings and (ii) use "significant flexibility" when determining whether the loans impacted by the coronavirus will be considered adversely classified credits.

• Supervisory Relief. To aid affected financial institutions, the FDIC will aim to reduce the burden of scheduling examinations by offering off-site reviews where applicable.

• Regulatory Reporting Requirements. The FDIC said that it will not assess penalties or take other supervisory actions if the financial institution is unable to meet compliance reporting requirements due to coronavirus-related reasons.

• Alternative Service Options for Customers. If a financial institution must close a facility temporarily, the FDIC urged the financial institution to (i) reduce disruptions to customers by providing an alternative service option and (ii) notify its primary federal or state regulator and customers of the temporary closure.