BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON, D.C. 20551
DIVISION OF CONSUMER
AND COMMUNITY AFFAIRS
CA 08-9
October 1, 2008
TO THE OFFICERS AND MANAGERS IN CHARGE OF CONSUMER AFFAIRS SECTIONS:
SUBJECT: Extension of CRA Consideration Period for Community Development Activities in Hurricanes Rita and Katrina Disaster Areas for an Additional 36 Months
Under the Community Reinvestment Act (CRA) regulations, examiners give favorable consideration to a state member bank’s 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 (Questions and Answers) further explain that state member banks may receive favorable consideration for such 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 agencies.2
Parts of the Gulf Coast were originally declared major disaster areas by the Federal Emergency Management Agency (FEMA) following Hurricanes Katrina and Rita in 2005.3 The Federal Reserve began providing CRA consideration for these disaster areas for a period of 36 months following the dates of the major disaster declarations. This 36-month timeframe has recently expired.
Consistent with the Questions and Answers, Federal Reserve staff is extending for an additional 36 months the time period for examiners to recognize in CRA evaluations disaster recovery-related revitalization or stabilization activities in the affected Gulf Coast areas. There is a demonstrable community need for an extension to continue to assist long-term recovery efforts in those areas. The need for this extension is demonstrated by the continued designation by FEMA of the major disaster areas following Hurricanes Katrina and Rita as active disaster areas. Accordingly, examiners should continue to provide CRA consideration for community development loans, investments and services that revitalize or stabilize those areas for an additional 36 months. The other agencies with CRA responsibilities4 are taking identical action. The purpose of the agencies’ action is to encourage continued support for disaster-recovery activities in the areas devastated by Hurricanes Katrina and Rita.5
Additionally, examiners are also reminded that state member banks located outside the designated disaster areas may receive favorable CRA consideration for community development activities that help to revitalize or stabilize the designated disaster areas related to Hurricanes Katrina and Rita, provided that the state member banks otherwise have adequately met the CRA-related needs of their local communities.
Please distribute copies of this letter to your examination staff for their immediate use. If you have any questions, please contact Anjanette Kichline, Senior Supervisory Consumer Financial Service Analyst at 202-785-6054, or Paul Robin, Manager, Oversight and Policy Section at 202-452-3140.
Sincerely,
(signed)
Sandra F. Braunstein
Director
Division of Consumer and Community Affairs
Notes:
Cross Reference:
CA 06-7 (March 2, 2006)
CA 06-5 (February 24, 2006)
CA 01-7 (July 12, 2001)
CA letters | 2008 Letters