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#2237790 - 06/09/20 09:16 PM CRA & "Disaster Area"
mnbanker09 Offline
100 Club
Joined: Jan 2018
Posts: 120
In reading the FDIC CRA Compliance Exam manual, the following is identified for review for an ISB:

"The level of the institution’s activity in the different assessment areas, including in low- and moderate income areas, designated disaster areas, or distressed or underserved non-metropolitan middle-income geographies...."

This may be a stretch, but with the entire country listed as a disaster area due to Covid, what would apply here for qualifying activity?

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#2238282 - 06/17/20 09:47 PM Re: CRA & "Disaster Area" mnbanker09
Len S Offline
Diamond Poster
Joined: Oct 2004
Posts: 1,945
Connecticut
Technically as long as the designation is not categorized as only "A" or "B".

§ll.12(g)(4)(ii)—1: What is a
‘‘designated disaster area’’ and how long
does it last?
A1. A ‘‘designated disaster area’’ is a
major disaster area designated by the
federal government. Such disaster
designations include, in particular,
Major Disaster Declarations
administered by the Federal Emergency
Management Agency (FEMA) (http://
www.fema.gov), but excludes counties
designated to receive only FEMA Public
Assistance Emergency Work Category A
(Debris Removal) and/or Category B
(Emergency Protective Measures).
Examiners will consider institution
activities related to disaster recovery
that revitalize or stabilize a designated
disaster area for 36 months following
the date of designation. 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 time
period may be extended.

However, from what I have been able to discern the Disaster Declaration for Covid-19 qualifies as Category B Emergency Protective Measures. If that is true and if no other category applies, then the Declaration would have no relevance for CRA as per the Q&A cited above.
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#2238299 - 06/18/20 03:08 PM Re: CRA & "Disaster Area" mnbanker09
Eagle06 Offline
New Poster
Joined: Jan 2018
Posts: 21
I had the same question! Have you checked out the CRA Frequently Asked Questions Related to COVID-19? It was posted by the OCC, but it is my understanding that the guidance will be issued on an interagency basis. FAQ #1 addresses designated disaster areas and qualifying activities.

https://occ.gov/topics/supervision-...vid-19-information/covid-19-cra-faqs.pdf

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#2238418 - 06/19/20 09:46 PM Re: CRA & "Disaster Area" mnbanker09
InFairness, CRCM Online
Platinum Poster
InFairness, CRCM
Joined: Nov 2010
Posts: 651
USA
The FRB, FDIC, and OCC have issued a Joint Statement on CRA Consideration for Activities in Response to the COVID-19.


https://www.fdic.gov/news/news/financial/2020/fil20019a.pdf
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#2238560 - 06/24/20 03:00 PM Re: CRA & "Disaster Area" mnbanker09
Len S Offline
Diamond Poster
Joined: Oct 2004
Posts: 1,945
Connecticut
GeoDataVision continues to receive significant numbers of questions regarding the Community Reinvestment Act ("CRA") and the impact of Covid-19. The prudential banking regulators have published several documents on the topic. Here is the typical question we are hearing about this topic.

Question: For the purposes of recognizing certain "revitalization and stabilization" activities for "community development" credit the Community Reinvestment Act recognizes some census tracts as "designated disaster areas" as published by FEMA. The Federal Emergency Management Agency ("FEMA") has issued major disaster declarations that include the entire country. Does that mean any and all activity in any census tract potentially qualifies for recognition under the "revitalization/stabilization" definition of community development?

Answer: Typically activities that attract or retain people or businesses to a designated disaster area will qualify for potential recognition under the revitalization/stabilization definition of community development under CRA. However, there is an important qualifier. Disaster Areas identified for Category A or Category B assistance are not considered (for CRA purposes) as "designated disaster areas". The Covid-19 major disaster declaration identifies the affected areas (all the USA) as qualified for Category B assistance. This category of assistance is considered to be of "temporary" nature and therefore would not ordinarily qualify for CRA purposes as designated disaster areas in which revitalization/stabilization activities would be recognized for community development qualification.

However, the agencies have issued a Q&A that addresses this topic and creates a carefully defined exception for the Covid-19 disaster declaration. In that Q&A the agencies state, "The agencies believe that the Coronavirus Disease (COVID-19) national emergency raises unique needs for revitalisation and stabilization activities that differ from those typically undertaken in response to natural disasters or other emergencies . . . therefore, the agencies will grant consideration for activities that revitalize or stabilize these areas by protecting public health and safety, particularly for low- or moderate-income individuals, low- or moderate-income geographies, or distressed or underserved nonmetropolitan middle-income geographies".

Notice that the Covid-19 exception from the normal disqualifier for Category B relief for disaster areas is related to revitalizing or stabilizing affected areas by protecting public health and safety.  Moreover, the agencies will give particular credit for such protective activity "for low- or moderate-income individuals, low- or moderate-income geographies, or distressed or underserved nonmetropolitan middle-income geographies."

To qualify for the Covid-19 exemption from the normal Category B limitation (for CRA purposes), activity that protects public health and safety therefore is essential for CD consideration under the revitalization/stabilization definition. Of course all revitalization/stabilization activity in low- or moderate-income tracts and distressed and underserved areas or other areas designated as disaster areas not limited to Category A or Category B assistance continues to potentially qualify without the need for the Covid-19 exemption. But if you are looking to get credit for revitalization/stabilization activity under the Covid-19 exemption for a designated disaster area the activity must protect public health and safety.

Don't forget the other 3 definitions of community development under CRA are not related to where the activity takes place (except it should be inside your assessment areas). So you can receive community development credit no matter the tract income classification or disaster area designation for all community development activities that promote affordable housing, community services, or economic development. It's only for revitalization/stabilization activity that tract income class, distressed or underserved status or disaster area designation matters
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#2240176 - 07/27/20 04:35 PM Re: CRA & "Disaster Area" Len S
TMatt87 Offline
Diamond Poster
TMatt87
Joined: May 2011
Posts: 1,928
Idaho
Originally Posted by Len S
Technically as long as the designation is not categorized as only "A" or "B".

§ll.12(g)(4)(ii)—1: What is a
‘‘designated disaster area’’ and how long
does it last?
A1. A ‘‘designated disaster area’’ is a
major disaster area designated by the
federal government. Such disaster
designations include, in particular,
Major Disaster Declarations
administered by the Federal Emergency
Management Agency (FEMA) (http://
www.fema.gov), but excludes counties
designated to receive only FEMA Public
Assistance Emergency Work Category A
(Debris Removal) and/or Category B
(Emergency Protective Measures).
Examiners will consider institution
activities related to disaster recovery
that revitalize or stabilize a designated
disaster area for 36 months following
the date of designation. 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 time
period may be extended.

However, from what I have been able to discern the Disaster Declaration for Covid-19 qualifies as Category B Emergency Protective Measures. If that is true and if no other category applies, then the Declaration would have no relevance for CRA as per the Q&A cited above.


Does anyone know where I can find the designation by county on the FEMA website? I've searched and couldn't find it anywhere.
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#2240192 - 07/27/20 06:05 PM Re: CRA & "Disaster Area" mnbanker09
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 79,347
Galveston, TX
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#2240211 - 07/27/20 07:17 PM Re: CRA & "Disaster Area" mnbanker09
TMatt87 Offline
Diamond Poster
TMatt87
Joined: May 2011
Posts: 1,928
Idaho
So my state's disaster declaration shows public assistance funds of $278k. It shows "Emergency Work (Categories A-B)" funds as only $70k. Since the public assistance amount is more than the total of category A and B, does that mean the other funds fall under qualifying categories?
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#2240515 - 07/31/20 09:37 PM Re: CRA & "Disaster Area" mnbanker09
Len S Offline
Diamond Poster
Joined: Oct 2004
Posts: 1,945
Connecticut
The FEMA declaration should clearly indicate what type of assistance has been approved.
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