OCC 97-1
Subject: Working with Borrowers           Description: Message to Bankers and Examiners
                Affected by Disasters

TO:  Chief Executive Officers of all National Banks, Department
         and Division Heads, and all Examining Personnel

PURPOSE

This issuance is intended to encourage bankers to work with
borrowers in communities affected by disasters, either natural or
man-made.  The OCC recognizes that the effects of such disasters
on individuals and businesses are often temporary, and that
prudent efforts to adjust or alter terms on existing loans in
affected areas should not be subject to examiner criticism.

POLICY

One of the principal objectives of the OCC's supervision by risk
approach is to achieve an accurate assessment of a bank's risk
management practices.   This assessment includes an evaluation of
how a bank identifies, monitors, manages, and controls risks when
a segment of its loan portfolio is affected by external factors,
such as a natural or man-made disaster.

The OCC recognizes that efforts by banks to work with borrowers
in communities under stress, if conducted in a reasonable manner,
are consistent with safe and sound banking practice, effective
risk management, and are in the public interest.

Banks may, as part of an effective risk management process,
choose to work with borrowers by extending repayment terms or
otherwise restructuring a borrower's debt obligations.  Such
cooperative efforts can ease pressures on troubled borrowers,
improve their capacity to service debt, and strengthen the bank's
ability to collect its loans.  Banks may also ease credit
extension terms for new loans to certain borrowers, consistent
with prudent banking and risk management practices.  This will
help such borrowers recover their financial strength and place
them in a better position to service their debts.

With proper risk controls and management oversight, these steps
can contribute to the health of the local community and serve
both the bank's and the customer's long-term interests. 
Consistent with long-standing OCC practice, such efforts by
lenders will not be subject to examiner criticism, if carried out
in a prudent manner.


The OCC has six district offices that should be used as initial
contact points for national banks in need of assistance in
dealing with customers affected by disasters.  For banks located
in the:



AREA                                                    CONTACT
Central states                                        Chicago at (312) 360-8800
IN, IL, KY, OH, MI, WI
Midwestern states                                 Kansas City at (816) 556-1800.
IA, KS, NE, ND & SD, MN, MO,
Northeast                                                New York at (212) 819-9860
CT, DE, MA, ME, MD, NH, NJ, NY, PA, RI 
Southeast states                                     Atlanta at (404) 659-8855
AL, FL, GA, MS, NC, SC, TN, VA, WV
Southwest                                               Dallas at (214) 720-0656
AR, LA, NM, OK, TX
Western states                                       San Francisco at (415) 545-5900 
AK, AZ, CA, CO, HI, ID, MT, NV, OR, UT, WA, WY

OTHER RELATED OCC RELEASES

The following banking and examining issuances contain additional
guidance for dealing with troubled loan situations:

  o  Banking Circular 255   Troubled Loan Workouts and Loans to
     Borrowers in Troubled Industries
  o  Examining  Circular 222   Agricultural Loan Classification 
  o  Banking Bulletin 93-12    Interagency Policy Statement on Credit
     Availability
  o  News Release 93-58   Federal Regulators Announce Additional
     Credit Availability Initiatives

Questions about this OCC bulletin, or any of the issuances listed
above, should be directed to the Office of the Chief National
Bank Examiner at (202) 874-5350.



                              
Eugene A. Ludwig
Comptroller of the Currency
Date: March 14, 1997