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Financial Institutions Address Tornado Damage

The Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the Tennessee Department of Financial Institutions have issued a statement regarding the recent tornadoes in Tennessee.

"[The agencies] recognize the serious impact of tornadoes in Tennessee on the customers and operations of many financial institutions and will provide appropriate regulatory assistance to affected institutions subject to their supervision," a release stated. "The agencies encourage institutions operating in the affected areas to meet the financial services needs of their communities."

CoreLogic’s Tornado Path Map revealed that approximately 250 square miles were affected by the damaging effects of the tornadoes. The current estimate of damaged residential and commercial properties from the 50 mile-long Tennessee tornadic event, extending well beyond the Nashville metro area, is as shown in the table below. CoreLogic expects the total damage to property from this event to exceed $1 billion.

AP News reports that much the storm tore through Nashville areas transformed by a recent building boom, including Germantown and East Nashville. There has been 16 deaths reported in Putnam County, three in Wilson County, two in Davidson County, which includes Nashville, and one in Benton County.

According to the statement, financial institutions should work constructively with borrowers in communities affected by tornadoes in Tennessee.

"Prudent efforts to adjust or alter terms on existing loans in affected areas should not be subject to examiner criticism," the statement said. "In supervising institutions affected by tornadoes in Tennessee, the agencies will consider the unusual circumstances these institutions face. The agencies recognize that efforts to work with borrowers in communities under stress can be consistent with safe-and-sound practices as well as in the public interest."

Additionally, for investors, institutions should monitor municipal securities and loans affected by tornadoes in Tennessee. Appropriate monitoring and prudent efforts to stabilize such investments are encouraged.

About Author: Seth Welborn

Seth Welborn is a Reporter for DS News and MReport. A graduate of Harding University, he has covered numerous topics across the real estate and default servicing industries. Additionally, he has written B2B marketing copy for Dallas-based companies such as AT&T. An East Texas Native, he also works part-time as a photographer.

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