Reference: FIL-20-2026
Official publication: Read the full FIL-20-2026 on the agency website
The Federal Deposit Insurance Corporation (FDIC) has historically recognized that natural disasters and severe weather events can significantly disrupt the operational stability of financial institutions and the economic well-being of the communities they serve. In response to the recent low weather systems that have impacted various regions across Hawaii, the FDIC has issued a formal notification of supervisory relief. This guidance is designed to facilitate the recovery process by granting affected institutions the flexibility needed to address the immediate needs of their customers while maintaining the safety and soundness of the banking system. For regulatory and compliance officers, understanding the scope of this relief is essential for ensuring that recovery efforts align with federal expectations and that the institution remains in good standing during subsequent examinations.
Executive Summary
- Regulatory Flexibility: The FDIC is encouraging institutions to work constructively with borrowers in the affected areas, suggesting that prudent loan modifications may not be subject to adverse regulatory criticism.
- Operational Relief: Provisions have been made for the temporary closure of branches and the establishment of mobile or temporary banking facilities without the standard prior notification periods, provided certain conditions are met.
- CRA Consideration: Financial institutions may receive positive consideration under the Community Reinvestment Act (CRA) for community development loans, investments, or services that support disaster recovery and revitalization.
- Reporting Accommodations: The FDIC has indicated a willingness to consider requests for extensions regarding the filing of Call Reports and other regulatory documentation if the storm has impaired the institution’s reporting capabilities.
- Lending Encouragement: Banks are encouraged to extend credit to help survivors and businesses rebuild, provided that such lending is conducted in a manner consistent with safe and sound banking practices.
- Consumer Protection Focus: While flexibility is granted, institutions must maintain robust consumer protection standards, ensuring that disaster-related modifications are transparent and fair.
What the Regulator Issued
The FDIC released a Financial Institution Letter (FIL) titled “Supervisory Relief to Help Financial Institutions and Facilitate Recovery in Areas of Hawaii Affected by Low Weather Systems.” This release, which can be found at the official FDIC website, serves as a formal directive to all FDIC-supervised institutions operating within the designated disaster areas of Hawaii. The issuance outlines a series of measures intended to reduce the administrative burden on banks as they navigate the aftermath of the severe weather. Specifically, the FDIC emphasizes that its supervisory staff will work closely with institutions to understand the unique challenges they face, ranging from physical facility damage to significant loan portfolio impairment. The regulator’s tone is one of cooperation, stressing that the primary goal is the restoration of essential financial services to the Hawaiian public.
Who Is Impacted
The impact of this supervisory relief extends to all financial institutions that are supervised by the FDIC and have a physical presence or a substantial customer base in the regions of Hawaii affected by the low weather systems. This includes state-chartered banks that are not members of the Federal Reserve System, as well as certain savings associations. Furthermore, the guidance is relevant for institutions headquartered outside of Hawaii that maintain branches or significant lending concentrations in the impacted islands. Impacted parties also include the borrowers—both individual consumers and commercial entities—whose financial stability has been compromised by the storms. The relief measures are particularly critical for community banks that serve as the primary source of credit for local businesses, as these institutions are often the most exposed to regional economic shocks caused by severe weather events.
Key Dates and Deadlines
Not specified in the release. While the relief is currently active, the specific duration of these supervisory accommodations often correlates with the formal disaster declarations issued by the Federal Emergency Management Agency (FEMA) or the Office of the Governor of Hawaii. Institutions should monitor subsequent FDIC bulletins for announcements regarding the expiration of these temporary measures.
Practical Action Checklist
- Portfolio Risk Assessment: Immediately conduct a systematic review of the loan portfolio to identify borrowers located in the storm-impacted regions and assess the potential for payment disruptions.
- Branch Status Inventory: Document any temporary closures or reduced operating hours at Hawaiian branch locations and maintain a log of when services are restored.
- Temporary Facility Notification: If establishing mobile branches or temporary offices, provide written notice to the FDIC Regional Office as soon as practicable, documenting the necessity of the location.
- CRA Activity Documentation: Create a dedicated internal file to track all disaster-related lending and community support activities to ensure they are properly credited during the next CRA examination.
- Call Report Coordination: Evaluate the institution’s ability to meet upcoming financial reporting deadlines; if a delay is anticipated, contact the FDIC Regional Office immediately to request an extension.
- Consumer Communication Strategy: Update the institution’s website and physical signage to inform customers of available relief programs, fee waivers, or temporary branch changes.
- Loan Modification Protocols: Establish clear internal guidelines for disaster-related loan modifications, ensuring consistency with both regulatory flexibility and internal risk tolerances.
- Physical Security Audit: Perform an immediate inspection of all physical assets in the affected areas to identify structural damage or security vulnerabilities created by the low weather systems.
- Employee Outreach: Assess the personal impact of the weather systems on bank staff, as employee displacement can significantly affect the institution’s operational capacity.
- Insurance Claim Initiation: Begin documenting storm-related losses for the institution’s own insurance claims while providing necessary documentation to customers for their claims.
- BSA/AML Vigilance: Maintain heightened monitoring for potential disaster-relief fraud, including suspicious wire transfers or unusual account opening activity.
- State Regulatory Alignment: Ensure that all actions taken under the FDIC relief are also in compliance with any parallel directives issued by Hawaii’s Division of Financial Institutions.
Open Questions / Watch Items
One of the primary open questions involves the specific geographic boundaries of the relief; while the FDIC mentions “areas of Hawaii affected,” institutions must wait for precise county-level designations to confirm the extent of their eligibility for certain CRA credits. Additionally, the long-term impact on capital requirements remains a watch item. If an institution experiences significant loan losses that deplete capital buffers, the FDIC’s willingness to provide forbearance on Prompt Corrective Action (PCA) triggers will be a critical area of concern. Compliance officers should also monitor for any interagency statements that might harmonize these FDIC measures with the expectations of the Office of the Comptroller of the Currency (OCC) or the Federal Reserve, ensuring a uniform approach across multi-regulator environments.
My Law Tampa is the publisher of this regulatory update and maintains a dedicated library of compliance memos and legal analyses. We are committed to providing the legal and financial community with timely information regarding regulatory shifts and disaster recovery protocols.
This memorandum is provided for informational purposes only and does not constitute legal advice. The transmission and receipt of this information do not create an attorney-client relationship between the reader and any attorney or law firm. Readers should consult with qualified legal counsel regarding the specific application of these regulations to their unique circumstances.
Source Materials
- Official publication: FIL-20-2026
- Regulator archive: FDIC memo archive
- Memo library: browse the full regulatory memo archive
- Related memo: Final Rule on Revisions to the Community Bank Leverage Ratio (CBLR) Framework
- Related memo: FDIC Issues Supervisory Relief for Tennessee Financial Institutions Following Severe Winter Storms
- Related memo: FDIC Issues Supervisory Relief for Mississippi Financial Institutions Following Severe Winter Storms
