Bureau notes ‘regulatory flexibility’ in wake of disasters, emergencies

(Sept. 17, 2021) Existing laws and regulations provide credit unions, banks and other supervised entities regulatory flexibility to take certain actions that can benefit consumers in communities under stress from disasters or emergencies and hasten recovery, CFPB said in policy guidance issued this week.

In a “statement on supervisory practices regarding financial institutions and consumers affected by a major disaster or emergency,” the bureau said it would consider the impact of major disasters or emergencies on supervised entities themselves when conducting supervisory activities.

“Supervised entities can make use of existing regulatory flexibility where doing so would benefit consumers affected by a major disaster or emergency,” the bureau wrote in the statement.

The statement offers examples of flexibility under Regulations B (implementing the Equal Credit Opportunity Act, ECOA), X (Real Estate Settlement Procedures Act, RESPA), and Z (Truth in Lending Act, TILA).

On supervisory response, the CFPB said it recognizes that supervised entities “may themselves experience difficulties due to a major disaster or emergency.” The bureau said that, when conducting exams or other supervisory activities, it would consider the circumstances institutions may face following a major disaster or emergency “and will be sensitive to good-faith efforts to assist consumers.”

Separately this week, NCUA joined with the federal banking agencies in issuing an interagency statement on supervisory practices regarding credit unions and banks affected by Hurricane Ida. The statement, relatively routine for the agencies in the wake of a storm or other natural disaster, noted regulators “recognize the serious impact of Hurricane Ida on the customers and operations of many financial institutions and will provide appropriate regulatory assistance to affected institutions subject to their supervision.”


Statement on Supervisory Practices Regarding Financial Institutions and Consumers Affected by a Major Disaster or Emergency