Lending institutions that serve farmers affected by the 2012 drought are being encouraged by the Federal Financial Institutions Examination Council to work with borrowers to modify loans, ease credit terms and expedite credit decisions.
The FFIEC said in a release Tuesday that it will "support efforts to originate and prudently modify loans" for affected farmers. In exchange for their efforts, lending institutions will receive consideration from examiners regarding the unusual circumstances in affected areas, the FFIEC said.
"Financial institutions that implement prudent loan workout arrangements will not be subject to criticism for engaging in these efforts even if the restructured loans have weaknesses that result in adverse classification or credit risk grade," the FFIEC said.
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