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Bulletin B-97-2

SUBJECT: Departmental Guidance Regarding Depository Institutions and Borrowers Affected by Natural Disasters
Date March 13, 1997

The department recognizes the serious impact that natural disasters could have on the operations of financial institutions across the state and will provide regulatory assistance to institutions subject to its supervision. The department encourages depository institutions in areas affected by such to meet the financial service needs of their communities.

To help facilitate the process of restoring the areas affected by any natural disaster, the department encourages state chartered banks to work constructively with borrowers in communities affected by these conditions and who are experiencing difficulties due to events beyond their control. This office realizes that the effects of such natural disasters on local businesses and individuals are often temporary, and that prudent efforts to adjust or alter terms on existing loans in the areas affected should not be subject to examiner criticism. In supervising institutions impacted by such, the department will take into consideration the unusual circumstances they face. The department recognizes that efforts to work with borrowers in communities under stress, if done in a manner consistent with sound banking practices, can both contribute to the health of the community and serve the long term interests of the institution.

If you have any questions regarding this Bulletin, please contact the department at 615-741-2236. Signed: Bill C. Houston, Commissioner

Bill C. Houston