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Financial Institution Letter

Agencies Grant a 36-Month Extension for CRA Consideration Given to Community Development Activities Responding to Hurricane Maria Disaster in Puerto Rico and the U.S. Virgin Islands

September 22, 2023  |  FIL-51-2023

Summary:

The Federal Deposit Insurance Corporation (FDIC), the Board of Governors of the Federal Reserve System (Board), and the Office of the Comptroller of the Currency (OCC) (collectively, the “agencies”) are granting a second 36-month extension for recognizing activities that help to revitalize or stabilize Puerto Rico and the U.S. Virgin Islands through September 20, 2026.

Statement of Applicability: The contents of, and material referenced in, this FIL apply to all FDIC-supervised financial institutions.

Highlights:

  • The CRA regulatory definition of “community development” includes revitalization or stabilization efforts in designated disaster areas.
  • Interagency Questions and Answers Regarding Community Reinvestment state that the agencies will favorably consider activities by financial institutions that revitalize or stabilize designated disaster areas within their assessment area(s) or broader statewide or regional areas. The guidance further explains that financial institutions may receive favorable consideration for such activities in a qualifying disaster area for 36 months following the date of designation by the federal government and that the agencies may extend this time period when there is a demonstrable community need.
  • In September 2017, Hurricane Maria caused widespread devastation in areas that are not connected to the mainland United States or within assessment area(s) or the broader statewide or regional areas of most banks, but have had economic impact and other effects that may extend to other parts of the nation.
  • In January 2018, the agencies issued a joint statement in response to inquiries from institutions and the magnitude of the disaster, to inform financial institutions that it was appropriate to give favorable consideration to community development activities by financial institutions located anywhere in the nation that help to revitalize or stabilize designated disaster areas in the U.S. Virgin Islands and Puerto Rico affected by Hurricane Maria. In recognition of ongoing need, an extension was provided by the agencies in May 2021.
  • The agencies have determined that ongoing demonstrable community need remains in the designated areas resulting from the damage caused by Hurricane Maria. As a result, the agencies are extending for the second time the period during which banks can receive consideration as part of CRA evaluations for disaster recovery-related revitalization or stabilization activities in Puerto Rico and the U.S. Virgin Islands through September 20, 2026.
  • Community development consideration will be provided only if the institution has been responsive to the needs and opportunities of its own assessment area(s).
  • Consideration for activities that assist the disaster areas or affected individuals will be given without regard to median income of the census tract or the personal income of the individual. However, the agencies may give greater weight to activities that are most responsive to community needs, including the needs of low- and moderate-income areas and individuals.

Related Topics:

Community Reinvestment Act