Texas' top bank regulator has instructed examiners to go easy on banks whose customers have been hurt by the state's devastating floods. Banking Commissioner Catherine A. Ghiglieri said last week that some banks may need to loosen lending standards in order to assist flood victims and that regulators need to recognize this when making examinations.

"As long as such programs are part of an informed, board-approved plan which considers the bank's overall exposure, the Banking Department recognizes that these efforts will assist the community over a short-term crisis," she said.

The state is still reeling from colossal flooding that swept central and southeast Texas two weeks ago, killing about 30 people and causing an estimated $1 billion of damage.

Ms. Ghiglieri also urged banks to understand how flood relief will work before making loans. Banks should understand, for example, that properties outside a so-called 100-year flood plain may not be covered by flood insurance, she said. Those not covered could have trouble repaying loans.

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