Dealing With Disaster

By Keith Schostag

As I am writing this blog, Hurricane Milton is barreling towards Florida, not even two weeks since Hurricane Helene made landfall. For those of you that are in Milton’s path, we hope that you are safe and stay safe. As with many natural disasters, the hurricane is just the beginning. Devastation is often left in its wake leaving the survivors to pick up the pieces. That’s why it is so important that credit unions meet their members’ needs. To that end, on October 2, 2024, the Federal and State Financial Regulatory Agencies released a statement on supervisory practices for financial institutions affected by Hurricane Helene. 

The statement discusses the following areas:

  1. Lending

    1. The agencies encourage credit unions to work with affected borrowers and state that “prudent efforts to adjust or alter terms on existing loans in affected areas are supported by the agencies and should not be subject to examiner criticism.”

  2. Temporary facilities

    1. If credit unions need to operate temporary facilities the relevant regulator will expedite any required approval, as appropriate. 

    2. Credit unions can start the approval process with a call to the relevant regulator.

  3. Publishing requirements

    1. If a credit union is facing disaster-related issues in meeting its publishing obligations, it should contact its regulator.

  4. Regulatory reporting requirements

    1. According to the statement, if a credit union is unable to satisfy its regulatory reporting requirements due to Hurricane Helene but takes prudent steps to comply, the “agencies do not expect to assess penalties or take other supervisory action.”

  5. Community Reinvestment Act

    1. Community development loans, investments, and/or services that revitalize or stabilize a federally designated disaster area may be eligible for CRA consideration.

  6. Investments

    1. Credit unions are encouraged to monitor municipal securities and loans affected by Hurricane Helene.

Credit unions may want to review the statement further for more information. 

Beyond the above, credit unions should note that there are more requirements and guidance when dealing with disasters. NCUA regulation, section 748.1(b) requires a credit union to file a catastrophic act report within five business days of any catastrophic act that occurs at its offices. When considering loans to those affected by a hurricane or other disaster, credit unions may consider special purpose credit programs under Regulation B, section 1002.8.

Here is a NCUA page on hurricane and disaster information that may be helpful. This page includes links to multiple NCUA letters, interagency and other resources on dealing with disasters. Here is a statement from the CFPB that discusses specific regulatory guidance when dealing with disasters. Here is an Interagency Supervisory Examiner Guidance for Institutions Affected by a Major Disaster.

To credit unions and those who are dealing with Helene, Milton, and other disasters, we hope you stay safe. If you have any compliance questions on disasters or otherwise, please don’t hesitate to contact us at compliance@americascreditunions.org.