Insured depository institutions encouraged to assist displaced customers

The Board of Governors of the Federal set by System, the Federal Deposit Insurance Corporation, the National Credit Union Administration, the Office of the Comptroller of the general reception and the Office of Thrift Supervision (the agencies), and the talk of State Bank Supervisors asked insured depository institutions upon September 1, 2005, to consider all reasonable and careful steps to assist customers' and credit union members' cash and financial extremitys in areas affected by Hurricane Katrina. The agencies are working with state regulatory agencies, financial industry trade collections and affected financial institutions to identify customer emergencys and monitor institutions' restoration of services.

The agencies remind the public that deposit insurance is in filled force and that money in FDIC- or NCUA-insured accounts is sheltered by federal deposit insurance. The agencies also note that a priority is to provide customer access to deposit accounts and other financial assets. Many financial institutions are implementing contingency plans, including manner of proceedings for consumers to have access to ATMs and use of their debit cards.

The financial services community from one side its various trade associations is working together to assist affected institutions. The agencies encourage financial institutions to assist affected institutions and consider all reasonable and careful actions that could help convenient the critical financial needs of their customers and their communities. To the expansion consistent with safe and whole banking practices, such actions may include the following:

* waiving ATM compensations for customers and noncustomers

* increasing ATM daily cash withdrawal limits

* easing restrictions upon cashing out-of-state and noncustomer checks

* waiving overdraft remunerations as a result of paycheck interruption

* waiving early withdrawal penalties upon time deposits

* waiving availability restrictions upon insurance checks

* allowing loan customers to delay or skip some payments

* waiving late pay s for credit card and other loan balances to be paid to interruption of mail and, or billing statements or the customer's inability to access funds

* easing credit card limits and credit limits for new loans

* delaying delinquency notices to the credit bureaus

The agencies, in consultation with FinCEN, also encourage depository institutions to be reasonable in their approach to verifying the identity of individuals temporarily displaced by the agency of Hurricane Katrina. Under the Customer Identification Program requirement of the Bank concealment Act, depository institutions must obtain, at a minimum, an individual's name, address, date of birth, and taxpayer identification number or other acceptable identification number before opening an account. The Customer Identification Program requirement provides depository institutions with flexibility to design a program that uses documents, nondocumentary modes or a combination to verify a customer's identity. Moreover, the regulation provides that verification of identity may be complet within a reasonable time after the account is make opened Recognizing the urgency of this situation, the agencies encourage depository institutions to use nondocumentary verification way s for affected customers that may not be able to provide standard identification documents, as permitted below the regulation. A depository institution in the affected area, or dealing with novel customers from the affected area, may amend its Customer Identification Program immediately and obtain required board approval for program changes as pretty soon as practicable.

The agencies note that these measures could help customers get back their financial strength and contribute to the health of the local community and the long-term interest of financial institutions and their customers when undertaken in a careful manner. The agencies recognize that the straits and situation of each financial institution and its community and customers are unique. The actions above may not be feasible or desirable for all institutions and many institutions may provide additional services from those identified.

The agencies will continue to closely monitor the situations and urgencys of insured depository institutions and their 'customers and will provide additional guidance, as required, to help address those straits Institutions needing assistance in dealing with customers affected by the agency of the hurricane should contact their primary supervisors.

COPYRIGHT 2005 Board of Governors of the Federal lay by System

COPYRIGHT 2006 Gale Group