CA 21-9: Extension of CRA consideration for community development activities in Puerto Rico and the U.S. Virgin Islands in response to hurricane Maria

CA 21-9: Extension of CRA consideration for community development activities in Puerto Rico and the U.S. Virgin Islands in response to hurricane Maria

BOARD OF GOVERNORS
OF THE FEDERAL RESERVE SYSTEM
WASHINGTON, D.C. 20551

DIVISION OF CONSUMER
AND COMMUNITY AFFAIRS

CA 21-9
May 27, 2021

TO THE OFFICERS AND MANAGERS IN CHARGE OF CONSUMER AFFAIRS SECTIONS:

SUBJECT:

Extension of CRA consideration for community development activities in Puerto Rico and the U.S. Virgin Islands in response to hurricane Maria

Applicability to Community Banking Organizations: This guidance applies to all institutions supervised by the Federal Reserve, including those with total consolidated assets of $10 billion or less.

The Board of Governors of the Federal Reserve System (Board), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC) are issuing the attached statement to extend the period for Community Reinvestment Act (CRA) consideration of community development activities that help to revitalize or stabilize Puerto Rico and the U.S. Virgin Islands related to Hurricane Maria. These islands were originally designated as major disaster areas due to Hurricane Maria on September 20, 2017,1 and the agencies are granting a 36-month extension to the original period provided in the January 2018 Interagency Statement on CRA Consideration for Community Development Activities in the U.S. Virgin Islands and Puerto Rico Following Hurricane Maria.2

The statement also explains that a financial institution with assessment area(s) located outside of Puerto Rico and the U.S. Virgin Islands will continue to receive consideration for community development activities that revitalize or stabilize the areas affected, as long as the institution has been responsive to the community development needs and opportunities of its assessment area(s).

If supervised financial institutions have questions about the guidance set forth in this letter, they are encouraged to contact the responsible Federal Reserve Bank. In addition, questions may be sent via the Board’s public website.3

signed by
Eric Belsky
Director
Division of Consumer and Community Affairs

Attachments:

• Interagency Statement: Agencies Extend Period for Favorable CRA Consideration Given to Community Development Activities Responding to Hurricane Maria Disaster in Puerto Rico and the U.S. Virgin Islands

Cross References:

• CA 18-1 CRA Consideration for Community Development Activities in the U.S. Virgin Islands and Puerto Rico Following Hurricane Maria
• CA 16-5 Interagency Questions and Answers Regarding Community Reinvestment

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Board of Governors of the Federal Reserve System Federal Deposit Insurance Corporation Office of the Comptroller of the Currency May 27, 2021 Agencies Extend Period for CRA Consideration Given to Community Development Activities Responding to Hurricane Maria Disaster in the Puerto Rico and the U.S. Virgin Islands This statement announces an extension of the period for Community Reinvestment Act (CRA) consideration for bank activities that help to revitalize or stabilize Puerto Rico and the U.S. Virgin Islands in response to Hurricane Maria (the “Hurricane”). As a result of the devastation caused by the Hurricane, the President designated Puerto Rico and the U.S. Virgin Islands as major disaster areas on September 20, 2017.1 Specifically, the Board of Governors of the Federal Reserve System (Board), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC) (collectively, the “agencies”) are granting a 36-month extension to the original period provided in the January 2018 Interagency Statement on CRA Consideration for Community Development Activities in the U.S. Virgin Islands and Puerto Rico Following Hurricane Maria (Interagency Statement) 2 for recognizing activities that help to revitalize or stabilize Puerto Rico and the U.S. Virgin Islands. Pursuant to their CRA regulations, the agencies give favorable consideration to a financial institution’s activities that meet the definition of “community development”3 or the criteria for qualifying activities,4 as applicable. These activities include loans, investments, and services that help to revitalize or stabilize designated disaster areas5 or, for OCC-regulated financial institutions, that otherwise meet the criteria for qualifying activities, 6 as applicable. The agencies’ Interagency Questions and Answers Regarding Community Reinvestment (Questions and Answers) guidance and, as applicable, OCC Bulletin 2020-99 further explain 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.7 The agencies have determined that the ongoing impact of the Hurricane in Puerto Rico and the U.S. Virgin Islands warrants an extension through September 20, 2023. These activities will be treated consistently with the agencies’ January 2018 Interagency Statement and, as applicable, OCC Bulletin 2020-99. Activities conducted by state member banks and state 1 See the Federal Emergency Management Agency’s (FEMA) relevant disaster declarations: Puerto Rico Hurricane Maria (DR 4339), https://www.fema.gov/disaster/4339, and U.S. Virgin Islands Hurricane Maria (DR 4340), https://www.fema.gov/disaster/4340. 2 Board CA 18-1; FDIC FIL-7-2018; OCC News Release 2018-6 3 See 12 CFR 25.04 (national banks and savings associations).12 CFR 228.12 (state member
banks); 12 CFR 345.12 (state nonmember banks). 4 See 12 CFR 25.04 (national banks and savings associations). 5 See 12 CFR 228.12(g)(4)(ii) (state member banks); 12 CFR 345.12(g)(4)(ii) (state nonmember banks). 6 See 12 CFR 25.04 (national banks and savings associations). 7 See 81 Fed. Reg. 48506 (July 25, 2016), Q&A §__.12(g)(4)(ii)—1; OCC Bulletin 2020-99, “Community Reinvestment Act: Key Provisions of the June 2020 CRA Rule and Frequently Asked Questions.” (November 9, 2020).

2 nonmember banks receive consideration provided that these institutions have been responsive to the community development needs and opportunities of their own assessment area(s). Activities conducted by national banks and savings associations receive credit as provided for in question 7 of OCC Bulletin 2020-99. Consideration will be given for all activities that assist the designated disaster areas or affected individuals, regardless of income. 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.