Highlights:
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The federal banking agencies, including the FDIC, encourage continued
support for disaster-recovery activities in the areas devastated by
Hurricanes Katrina and Rita. The agencies will continue to provide CRA
consideration for community development loans, investments, and services
that help revitalize or stabilize those areas through 2014.
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The FEMA designation of Hurricanes Katrina and Rita disaster areas continues
to remain in effect. Coverage information is available at http://www.fema.gov/news/disasters.fema?year=2005.
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Consistent with earlier 2005 and 2008 guidance, significant consideration
will be given to activities that benefit low- and moderate-income
individuals or areas, including activities aimed at benefiting displaced
individuals.
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Given the impact of these disasters, banks may receive CRA consideration for
activities that help to revitalize or stabilize these designated areas, even
if the activities are outside their assessment areas (or the broader
statewide or regional areas), if they have adequately met assessment area
CRA-related needs.
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The Interagency Questions and Answers regarding Community Reinvestment at 75
FR 11647 §__.12(g)(4)(ii)–1 dated March 11, 2010, further explain
how banks may receive consideration for qualified activities in a major
disaster area, generally for 36 months after designation. They indicate that
the federal banking agencies may extend the time period.
Continuation of FIL-9-2012
Distribution:
FDIC-Supervised Banks (Commercial and Savings)
Suggested Routing:
Chief Executive Officer
CRA Officer
Compliance Officer
Related
Topics:
Community Reinvestment Act
Part 345 of the FDIC Regulations
Interagency Questions and Answers Regarding Community Reinvestment
Contact:
Janet Gordon, Senior Policy Analyst, at (202) 898-3850 or jagordon@fdic.gov; or Sharon Vejvoda,
Senior Examination Specialist, at (202) 898-3881 or svejvoda@fdic.gov
Note:
FDIC Financial Institution Letters (FILs) may be accessed from the FDIC's Web
site at www.fdic.gov/news/news/financial/2012/index.html.
To receive FILs electronically, please visit http://www.fdic.gov/about/subscriptions/fil.html.
Paper copies may be obtained through the FDIC's Public Information Center, 3501
Fairfax Drive, E-1002, Arlington, VA 22226 (877-275-3342 or 703-562-2200).
Financial Institution Letter
FIL-9-2012
February 22, 2012
Purpose: The federal banking
agencies (agencies) have extended the time period for CRA consideration for
activities that support the revitalization and recovery of the areas devastated
by Hurricanes Katrina and Rita.
Background: Under the CRA regulations, institutions may receive
consideration for activities that meet the definition of "community
development."1 This definition includes loans, investments,
and services that help to revitalize or stabilize designated disaster areas. The
Interagency Questions and Answers Regarding Community Reinvestment further
explain that banks may receive consideration for qualified activities in a major
disaster area for 36 months following the date of designation by the federal
government. Where there is a demonstrable community need to extend the period
for recognizing revitalization or stabilization activities in a particular
disaster area to assist in long- term recovery efforts, this 36-month time
period may be extended by the agencies2.
Parts of the Gulf Coast were originally declared major disaster areas by FEMA
following Hurricanes Katrina and Rita in 20053. The agencies began
providing CRA consideration for activities in these disaster areas for a period
of 36 months from the dates of the major disaster designations. When the initial
36-month timeframe expired in 2008, the agencies determined there was ongoing,
demonstrable community need as a result of the unprecedented damage caused by
the hurricanes in 2005 to housing, business, and public infrastructure in the
Gulf Coast area. This need warranted an extension of CRA consideration of
community development activities to assist long-term recovery efforts in the
affected areas. The 2008 extension was supported by the continued designation by
FEMA of areas affected by Hurricanes Katrina and Rita as active disaster areas.
Agency CRA Consideration: The agencies have determined that
ongoing, demonstrable community need as a result of the damage caused by the
hurricanes remains in the designated areas. This ongoing need is supported by
the continued designation by FEMA of the affected areas as active disaster
areas. As a result, the FDIC is extending the period during which banks can
receive consideration as part of CRA evaluations for disaster recovery-related
revitalization or stabilization activities in the affected Gulf Coast areas for
approximately another three years, through December 31, 2014.
Consistent with the original 2005 and subsequent 2008 guidance, the agencies
will continue to consider community development loans, investments, and services
that revitalize or stabilize those areas and to give significant weight to
activities that benefit low- and moderate-income individuals or areas, including
activities aimed at benefiting displaced individuals across the country.
Given the magnitude of these disasters and their impact on the country, a bank
may receive CRA consideration for community development activities that help to
revitalize or stabilize the designated disaster areas, even if these activities
are outside its assessment area(s), or the broader statewide or regional areas.
However, the bank must have otherwise adequately met the CRA-related needs of
its local communities.
1
12 CFR §__.12(g)
2
Interagency Questions and Answers Regarding Community Reinvestment at 75 FR
11647 §__.12(g)(4)(ii)–1 dated March 11, 2010
3
http://www.fema.gov/news/disasters.fema?year=2005
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