FDIC, Federal Reserve Board, and OCC Issue Interagency Statement on CRA Consideration for the U.S. Virgin Islands and Puerto Rico Due to Hurricane Maria
The interagency statement recently issued by the Federal Deposit Insurance Corporation (FDIC), Federal Reserve Board of Governors (FRB), and the Office of the Comptroller of the Currency (OCC) addresses the availability of Community Reinvestment Act (CRA) consideration for bank activities to help revitalize or stabilize the U.S. Virgin Islands and Puerto Rico. These areas were designated as major disaster areas as a result of Hurricane Maria.
The FDIC, FRB, and OCC (the Agencies) issued this interagency statement in response to specific requests from financial institutions subject to the CRA. Such institutions wanted to know whether their community development activities (e.g., activities to revitalize or stabilize designated disaster areas) to assist with the hurricane’s effects are eligible for CRA consideration given the fact that these disaster areas are outside the institutions’ assessment areas. The statement clarifies that, as long as an institution outside of the disaster areas has been responsive to the community development needs and opportunities of its own assessment areas, such institution will receive consideration for community development activities resulting from the hurricane.
This position appears to be consistent with related issues addressed in the Interagency Questions and Answers Regarding Community Reinvestment. Among other things, this guidance provides that financial institutions that perform community development activity in a broader statewide or regional/multistate area that includes its assessment area(s) will receive consideration for that activity regardless of whether the activity benefits the assessment area, so long as the entity has been responsive to its area’s needs and opportunities.
Noting that the reach of this hurricane extended to areas not connected to the U.S. mainland but with resulting economic impact and other effects potentially spanning to other parts of the county, the Agencies concluded that it is appropriate to give favorable consideration to such activities that help to revitalize or stabilize the impact from the hurricane by financial institutions, wherever located in the country. Thus, credit will be given to activities like assisting people displaced by the hurricane.
Although CRA consideration will be given for assistance to the disaster areas or affected individuals regardless of the census tract’s median income or such individual’s personal income, the Agencies may give greater weight to activities that are the most responsive to community needs, including the needs of low- and moderate-income (LMI) areas and individuals.
