NEW ORLEANS –
Comptroller of the Currency John C. Dugan said today regulators want to
encourage partnerships between local banks and institutions outside the Gulf
Coast region to make a real difference to hard-pressed communities devastated
by Hurricanes Katrina and Rita.
In a speech at the Gulf
Coast Bankers Conference, Mr. Dugan said regulators were in New Orleans to
listen – and to learn.
“We want to gain a
better understanding of the practical and technical problems you face,” he
said. “We want to facilitate dialogue
between local bankers and those of you who are joining us from institutions
outside the region. We want to
encourage partnerships between you – partnerships with the potential to make a
real difference to these hard-pressed communities.”
“Those are the goals of this forum,” Mr.
Dugan said. “As regulators, we are
determined to do whatever we can to be helpful.”
One way regulators are
helping, Mr. Dugan said, is through the recently released Community
Reinvestment Act (CRA) interpretive questions and answers that allow banks to
receive CRA consideration for disaster recovery-related activities that help to
revitalize and stabilize a designated disaster area. While current guidance allows CRA consideration for activities
undertaken within three years of a disaster designation, regulators plan to
extend that period, given the long-term needs of the Gulf region, Mr. Dugan
said.
Mr. Dugan also reminded
bankers that regulators have authority, under Part 24 of OCC regulations, to
extend CRA consideration to a national bank that makes an equity investment of
any community development activity that revitalizes or stabilizes designated
disaster areas.
“Although bankers have
done a fine job in the first phase of dealing with the aftermath of the storms,
we’re in the second phase, and the going will be slower,” Mr. Dugan said. “Much has already been accomplished. But the going is still slow. Key decisions remain to be made. Clearly, this is a long-term project – a
project that will require patience as well as resources to accomplish.”
The Comptroller said
that the toughest financial decisions bankers must make pertain to the
treatment of individual loans. Regulators
have tried to assist bankers by providing clear and consistent guidance, but
the decisions must be made by bankers themselves on a case-by-case basis, Mr.
Dugan said.
“I have told our examiners and our banks that
it would be our policy not to second-guess decisions made to work with
borrowers,” Comptroller Dugan said. “I
stand by that policy.”
Mr. Dugan said that
regulators want bankers to work with customers in whatever ways are most
conducive to rebuilding the affected communities, while observing fundamental
safety and soundness standards. In this
context, it is essential, that bankers accurately assess customers’ underlying
creditworthiness and repayment ability.
“The rebuilding of the
Gulf Coast is a great challenge,” Mr. Dugan concluded. “We also believe it’s a great opportunity.”
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The Office of the
Comptroller of the Currency was created by Congress to charter national banks,
to oversee a nationwide system of banking institutions, and to assure that
national banks are safe and sound, competitive and profitable, and capable of
serving in the best possible manner the banking needs of their customers.