Gov. Blagojevich urges banks to ease loan requirements during flood recovery

CHICAGO - Governor Rod R. Blagojevich today ordered the Illinois Department of Financial and Professional Regulation (IDFPR) to direct lenders to consider easing loan terms and repayment requirements for Illinois families and businesses located in the 24 counties designated as disaster areas.   Lending institutions are being asked to offer their customers as much flexibility as possible during the next few months as they cope with flood recovery efforts.   

 

"Families should not have to worry about foreclosure of their homes or availability of their funds while they try to rebuild their lives," said Gov. Blagojevich.  "We're asking all lending institutions in the state to do what they can to help families recover from the flooding."

 

The flood profoundly impacted consumers and businesses in communities across the state.  As a result, the state is calling on Illinois lending institutions to consider adopting measures to assist customers who reside in any one of the 24 counties that have been declared a disaster area.  Some of the measures that the state is urging:

 

            •           extending the terms of loan repayments;

 

            •           restructuring a borrower's debt obligations; and/or

 

            •           easing loan documentation or credit terms for new loans to certain borrowers, consistent with prudent  banking practice.

 

These measures could help borrowers recover their financial strength and enable them to be in a better position to repay their debts. In addition, these recovery efforts can contribute to the health of the local community and the long-term interests of the lending institution.

 

Illinois licensed lending institutions that provide this kind of assistance over the next 90 days to flood victims will not be negatively evaluated by the Department for such practices.

 

The text of the letter being sent to banks appears below:

 

At the direction of Governor Rod R. Blagojevich, the Illinois Department of Financial and Professional Regulation has adopted several measures to assist Illinois residents and businesses that have been affected by the recent floods in Illinois. 

                                                                                   

The flood profoundly impacted both consumers and businesses.  As a result, IDFPR is calling on all Illinois lending institutions to consider adopting measures to assist customers who reside in any one of the 24 counties that have been declared a disaster area.  Some of the measures that we urge you to consider include:

 

            *          Extending the terms of loan repayments;

 

            *          Restructuring a borrower's debt obligations; and/or

 

            *          Easing loan documentation or credit terms for new loans to certain borrowers, consistent with prudent     banking practice.

 

These measures could help borrowers recover their financial strength and enable them to be in a better position to repay their debts.  In addition, these recovery efforts can contribute to the health of the local community and the long-term interests of the lending institution.

 

For all lending institutions regulated by IDFPR, the Department will not negatively evaluate any lending institution that engages in the foregoing flood assistance practices over the next 90 days.

 

Illinois lending institutions that need assistance in helping customers affected by the floods should contact IDFPR's Division of Banking at 217-785-2900.  Thank you, in advance, for partnering with us in this important effort.