CRA credits for helping out with disaster relief ?

Posted By: zozo

CRA credits for helping out with disaster relief ? - 08/30/17 04:17 PM

Will a bank receive CRA credits for helping out with disaster relief by offering small, low cost loan to our customers? If yes, what kind of credit? (disaster is in the Bank’s AA area)

Many thanks in advance!
Posted By: Kathleen O. Blanchard

Re: CRA credits for helping out with disaster relief ? - 08/30/17 04:31 PM

The definition of community development includes activities that revitalize or stabilize designated disaster areas. Usually, the activities can extend beyond your AA. The activities can be loans, services and investments.

Here is a nice write up by the OCC on the subject.

https://www.occ.gov/topics/community-aff...r-areas-cra.pdf
Posted By: zozo

Re: CRA credits for helping out with disaster relief ? - 08/30/17 04:55 PM

Thank you, Kathleen B!

Can you please help me to further understand that:
If we offer small amounts, low cost loans to our customers regardless if they are low/moderate income people or in low/moderate census tracts, can we get CRA loan credit under lending test?

We are small bank. So, we are not required to have CD loans/service/investment. I know CD activities (loan/service/investment) are a plus for a small bank. However, we need to have satisfactory lending test first.
Many thanks again!
Posted By: Kathleen O. Blanchard

Re: CRA credits for helping out with disaster relief ? - 08/30/17 05:05 PM

Yes, helping people to recover will work for CRA. Business loans (that are not already captured under small business) will count as well.
Posted By: VMack

Re: CRA credits for helping out with disaster relief ? - 08/31/17 07:53 PM

Kathleen, does the disaster have to be in the bank's assessment area in order to receive credit?
Posted By: Tennismom

Re: CRA credits for helping out with disaster relief ? - 09/01/17 06:45 PM

I recall when Katrina hit New Orleans the bank made a contribution towards the relief fund and the examiners gave our bank investment credit even though it was outside our AA and outside a statewide or regional area.

This is from an OCC Bulletin from 2006 and the FDIC followed their lead: [/i] "...However, due to the unprecedented impact from hurricanes Katrina and Rita, examiners have been given additional flexibility when evaluating the geographic aspect of CRA-related activities in these designated disaster areas. Therefore, national banks located outside the designated disaster areas may receive positive CRA consideration for activities that revitalize or stabilize the designated disaster areas related to hurricanes Katrina and Rita, provided that the banks have otherwise adequately met the CRA-related needs of their local communities." [i]

There was a Joint Release issued last week: Statement on Supervisory Practices Regarding Financial Institutions and Borrowers Affected by Hurricane Harvey, however it speaks specifically of CRA consideration for community development loans, investments, or services that revitalize or stabilize federally designated disaster areas in their assessment areas or in the states or regions that include their assessment areas. https://www.fdic.gov/news/news/press/2017/pr17064.html

Maybe they will reconsider.
Posted By: VMack

Re: CRA credits for helping out with disaster relief ? - 09/01/17 08:12 PM

Thank you Tennismom.
Posted By: txgal, CRCM

Re: CRA credits for helping out with disaster relief ? - 10/02/17 08:13 PM

We just experienced Hurricane Harvey in our AA and now are offering low rate loans to the small businesses who were affected by the storm. Just want to clarify that we can report these as Community Development even if they are less than $1 million as long as we don't report them as CRA small business too.

What about low rate loans to individuals who lost cars, home repair, etc.?
Posted By: learningdaily

Re: CRA credits for helping out with disaster relief ? - 10/18/17 04:38 PM

Originally Posted By txgal, CRCM
Just want to clarify that we can report these as Community Development even if they are less than $1 million as long as we don't report them as CRA small business too.


I have this same question. Thanks for asking. Hope to see a response soon.
Posted By: Tennismom

Re: CRA credits for helping out with disaster relief ? - 10/18/17 05:01 PM

learningdaily - -

There was some dialogue in this post concerning the same topic:

https://www.bankersonline.com/forum/ubbt...vey#Post2149959