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Federal Reserve Bank of Dallas
2200 N. PEARL ST.
DALLAS, TX 75201-2272

December 7, 2005

Notice 05-76

TO: The Chief Executive Officer of each
financial institution and others concerned
in the Eleventh Federal Reserve District

SUBJECT
Meeting the Critical Financial Needs of Those
Affected by Hurricane Katrina
DETAILS
The Board of Governors of the Federal Reserve System, the Federal Deposit Insurance
Corporation, the National Credit Union Administration, the Office of the Comptroller of the
Currency, and the Office of Thrift Supervision (the agencies), and the Conference of State Bank
Supervisors are encouraging insured depository institutions to consider all reasonable and prudent actions that could help meet the critical financial needs of their customers and their communities affected by Hurricane Katrina.
ATTACHMENT
A copy of the joint press release is attached.
MORE INFORMATION
For more information, please contact Bobby Coberly at (214) 922-6209, or Randy Steinley
at (713) 483-3117, Banking Supervision Department. For additional copies of this Bank’s notice,
contact the Public Affairs Department at (214) 922-5254 or access District Notices on our web
site at www.dallasfed.org/banking/notices/index.html.

For additional copies, bankers and others are encouraged to use one of the following toll-free numbers in contacting the Federal
Reserve Bank of Dallas: Dallas Office (800) 333-4460; El Paso Branch Intrastate (800) 592-1631, Interstate (800) 351-1012;
Houston Branch Intrastate (800) 392-4162, Interstate (800) 221-0363; San Antonio Branch Intrastate (800) 292-5810.

Press Releases

Federal Financial Institutions Examination
Council

For Immediate Release

Press Release
November 30 , 2005

The Board of Governors of the Federal Reserve System, the Federal
Deposit Insurance Corporation, the National Credit Union Administration,
the Office of the Comptroller of the Currency, and the Office of Thrift
Supervision (the agencies), and the Conference of State Bank Supervisors
are encouraging insured depository institutions to consider all reasonable
and prudent actions that could help meet the critical financial needs of their
customers and their communities affected by Hurricane Katrina.
Following Katrina, the agencies encouraged lenders to work with
borrowers affected by the devastating storm. Many lenders responded by
deferring loan payments from 60 to 120 days, with 90 days being the most
common period. As the end of many initial deferral periods approaches,
many insured depository institutions and customers have inquired about
the agencies’ views on additional deferral periods, as well as what happens
to the amount due when the deferral period ends.
The agencies continue to encourage lenders to work with both individual
and commercial borrowers who have been affected by the storms. It is
recognized that a great deal of uncertainty exists for many borrowers and it
will take time to work through each individual situation. Granting
additional deferral periods for some borrowers in accordance with sound
risk management practices may be appropriate given that the timing and
amount of insurance payments, disaster payments, and other assistance
may still be unknown.
Although deferral programs and individual workout arrangements may
vary, the agencies encourage institutions to provide flexible repayment
terms at the end of the deferral period, such that lump sum payments of all
deferred interest and principal do not become due immediately when
payments resume. In cases where principal and interest have been
temporarily deferred, at the end of the deferral period the lender should
accord the account the same payment status it had before the deferral
period began. In such circumstances, loans that were current before
Katrina would be current when the deferral period ends and loans that
were past due prior to the storm would be past due the same number of
days they were past due when the deferral was made.
The agencies encourage institutions to continue efforts to contact their
customers. By the same token, it is of vital importance that borrowers
displaced by the storm contact their lending institution, if they have not

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already done so. If contact has not been made by the end of the deferral
period, the loan would be viewed as carrying a higher level of risk that
should be addressed by the financial institution.
Institutions, consumers, and other interested parties are encouraged to visit
the Federal Financial Institutions Examination Council’s (FFIEC) Web site
at http://www.ffiec.gov/katrina.htm for more detailed guidance that
addresses various repayment options and the regulatory reporting
requirements surrounding them. The agencies will continue to closely
monitor the situation and the needs of insured depository institutions and
their customers. Additional guidance will be provided, as required, to help
address those needs. Institutions in need of assistance in dealing with the
effects of the hurricane should contact their primary supervisor.
For additional information concerning this press release, please contact
Tamara J. Wiseman, Executive Secretary for the FFIEC, at 703-516-5590.

The FFIEC was established in March 1979 to prescribe uniform principles, standards, and
report forms and to promote uniformity in the supervision of financial institutions. The
Council has five member agencies: the Board of Governors of the Federal Reserve System,
the Federal Deposit Insurance Corporation, the National Credit Union Administration, the
Office of the Comptroller of the Currency, and the Office of Thrift Supervision. The
Council's activities are supported by interagency task forces and by an advisory State
Liaison Committee, comprised of five representatives of state agencies that supervise
financial institutions.

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Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102