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#2188530 - 08/09/18 03:24 PM Hurricane Irma Relief- CDL?
Trinijah1 Offline
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Joined: Jun 2017
Posts: 2
Question: Community Development Loans, We are providing a loan to a local government for Hurricane Relief from Hurricane Irma, loan amount is over $1 million. Can/ should this be counted as a Community Development Loan?

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CRA
#2188587 - 08/09/18 06:28 PM Re: Hurricane Irma Relief- CDL? Trinijah1
mrogersfib Offline
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Joined: Aug 2018
Posts: 116
Loans that have the CD purpose of revitalization and stabilization specifically targeted to designated disaster areas that can be reasonably assessed as a major disaster area. FEMA Public Assistance Categories A, and B do not qualify for CRA consideration, unless the disaster area is already inside of your assessment area. Also, the loan must take place within 36 months AFTER the event.

Make sure you provide a lot of documentation around your loan to justify why it either revitalizes or stabilizes the area. Look for government revitalization and stabilization plans (can exist from before the disaster), or disaster recovery plans. There will be a significant benefit to your bank if your loan specifically targets community credit needs, and even greater weight if they also target low- to-moderate-income people, so you will need to do some research there.

After Hurricane Maria, I had a few lenders who had pending deals in Puerto Rico, but I had to tell them they would not work for CRA because it would be reasonable to assume that those was not due to disaster relief. As such they are outside of the banks assessment area.

Further innovative and responsive activities that can be given favorable consideration are things such as waiving ATM fees, overdraft fees, early penalty fees on CD redemptions, waiving availability restrictions on insurance checks, allowing customers to waive, or defer loan payments, delaying submissions of delinquencies to the credit bureaus (for customers living, or located in the disaster area). To mitigate risk only apply such waivers to customers in the area to a limited amount of time (1-2 months).

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#2188689 - 08/10/18 02:30 PM Re: Hurricane Irma Relief- CDL? mrogersfib
Trinijah1 Offline
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Joined: Jun 2017
Posts: 2
Thank you for your response..

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