WASHINGTON Oct 16 A group of U.S. financial
regulators on Tuesday urged banks to keep credit flowing to
businesses hurt by a historic drought that has severely damaged
crops in the country's Midwest region.
Banks should consider expediting lending decisions when
possible, extending or restructuring borrowers obligations and
easing credit terms, the Federal Financial Institutions
Examination Council (FFEIC), composed of the Federal Reserve,
the Federal Deposit Insurance Corporation and other top bank
regulators, said in a joint statement.
"The FFIEC is strongly encouraging financial institutions in
areas affected by drought conditions to work constructively with
borrowers," the group said in a statement.
"The effects of natural disasters on the agricultural sector
are often temporary, and prudent loan modification efforts can
help stabilize borrowers," the FFIEC added.
A lack of significant rain so far this fall has U.S. farmers
and government agriculture officials worried that the worst
drought in 56 years, which devastated this year's U.S. corn and
soybean production, will continue and hurt next year's crops.