Fed to Gulf Coast Banks: Help Those Hurt by the Spill

The Federal Reserve urged Gulf Coast banks Wednesday to help customers get through what is sure to be a tough road ahead economically due to the ongoing oil disaster.

In response to this disaster, financial institutions can take measures to meet the critical financial needs of their customers and their communities. Efforts taken by financial institutions to work with their borrowers and customers in affected communities, if conducted in a reasonable and prudent manner, are consistent with safe and sound banking practice.

The Atlanta Fed estimated in May that about 132,000 jobs were directly at risk from the spill, though measuring how many of those people are now out of work has been more difficult. Here’s their breakdown of what types of jobs are potentially affected and where:

To ease the Gulf Coast’s ongoing economic pain, the Fed says banks should consider:

• Temporarily waiving late payment charges, ATM fees and penalties for early withdrawal of savings.
• Expediting lending decisions when possible, consistent with safety and soundness.
• Extending or restructuring borrower debt obligations in anticipation of the receipt of funds based on claims the borrower may have filed with BP.
• Easing credit terms or fees for loans to certain borrowers, consistent with prudent banking practice.

“These measures could help customers recover financially and be better positioned to honor their obligations,” the central bank’s statement said. “In the affected areas, these efforts can contribute to the health of the local community and the long-term interests of the institution and its customers.”