Frequently Asked Questions From Financial Institutions Affected by COVID-19
The Commissioner is issuing these FAQs as a supplement to those issued earlier this week by the FDIC. We understand your institution is making adjustments to its normal operations and we appreciate your willingness to continue to serve your communities and customers. At this point we don’t know how long it will take for conditions to return to normal and we don’t know what the new normal will be. Of primary importance, we recognize the need for patience as institutions work through this crisis.
We also understand that all institutions will be faced with customer needs that require creative and unique responses. Existing customers may need accommodations that the institution (and regulators) have not needed to consider before now. Through these FAQs, the Commissioner is wanting to make clear that the Department intends to give both borrowers and lenders the benefit of any doubt over the next several months. In addition, examiners will be given the freedom to be flexible when making decisions during future examinations.
1. Working with Borrowers. What are your suggestions for avoiding criticism at future examinations with regard to efforts taken during the next few weeks and months to assist our borrowers?
The most important thing at this point is to document the credit file as much as possible, outlining the situation with the borrower and the action taken by the institution. Additional support for your decisions could include industry metrics, which measure economic impacts on specific business lines and support credit actions taken with an affected segment of the loan portfolio. The objective is to support the credit decision like any other, explaining how the accommodation is in the best interest of not only the borrower, but also the institution. Supporting documentation may even be added as the credit (and crisis) progresses since it is more important to address immediate customer needs during this time.
2. Closing a lobby but Maintaining Drive-Through Service. If we close our lobby but continue to provide service through the drive-through, is there any notice or approval requirement with the State Banking Department?
No notice or approval is required if your institution modifies its operations at a location but continues to provide services. Additionally, if only the hours of operation are modified, no notice or approval is required. However, if you provide services at a location “by appointment only” but the facility is otherwise closed to the public, please send notice of that arrangement so that it may be approved. If a facility has no drive-through operation and its lobby will be closed, State Banking Department approval is necessary.
3. Access to Safe Deposit Boxes. What is the rule on allowing our customers access to their safe deposit boxes if our lobby is closed?
The bank’s relationship with its safe deposit customers is largely defined by the lease agreement by which the box is obtained. The lease may describe when a customer may access the box, but if not, it likely “implies” that the customer may only have access to a box when the bank’s lobby is open to the public. We suggest that if you are serving customers in the lobby “by appointment only” that you include the safe deposit customers and perhaps include a specific contact person and number for that service.
4. Board Meetings. May we conduct our institution’s board meeting remotely (i.e., by teleconference or videoconference)?
Yes, you may conduct your board and committee meetings by teleconference or videoconference. However, please remember to designate someone to take minutes of the meeting.
5. Bank Examinations. If my institution is scheduled to be examined during the next few weeks, will the examination be postponed?
Examinations will not be postponed but will be conducted off-site. If possible, you may wish to begin preparing loan data for review off-site. Of course, the examination will likely move at a slower pace and we appreciate your patience as we work through these unusual circumstances.