Regulators Issue Statement Regarding Gulf Coast Crisis

Posted by Orb Staff on July 14, 2010 No Comments
Categories : Residential Mortgage

deral financial regulatory agencies and the Conference of State Bank Supervisors issued a joint statement to assist financial institutions and their customers affected by the oil spill crisis facing the states along the Gulf of Mexico. The regulators' statement encourages financial institutions to work with their customers and consider measures to assist creditworthy borrowers affected by the oil spill. The regulators recommend extending or restructuring borrower debt obligations in anticipation of the receipt of funds based on claims the borrower may have filed with BP, and easing credit terms or fees for loans to certain borrowers, consistent with prudent banking practice. The statement also calls on examiners to consider the unusual circumstances facing banks and credit unions in affected areas in determining the appropriate supervisory response to safety-and-soundness. ‘Giving consideration to the terms of any modification or workout agreement, examiners will expect institutions to appropriately recognize credit losses as soon as a loss can be reasonably estimated,’ the regulators said in their statement. ‘Moreover, examiners will expect an institution to preserve the integrity of its internal loan grading methodology and maintain appropriate accrual status and reserves on affected credits.’ The full statement is available [link=http://www.occ.gov/ftp/release/2010-78a.pdf]online[/l

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