As Puerto Rico and other areas remain in crisis following Hurricane Maria in September, federal bank regulatory agencies have announced that they will give favorable consideration under the Community Reinvestment Act (CRA) regulations to banks located outside of the most heavily impacted areas who work to help revitalize and stabilize the damaged locales. The purpose of the CRA is to encourage financial institutions to help meet local credit and community development needs, such as in areas hit by natural disasters.
The Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency announced the plan in a joint statement. It confirms that “financial institutions located outside these disaster areas will receive consideration for community development activities that resulted from the hurricane as long as the institution has been responsive to the community development needs and opportunities of its own assessment areas.”
The economic difficulties of Hurricane Maria have already spread to parts of the coastal states such as Florida, as DS News reported earlier this month. Around 300,000 Puerto Ricans evacuated to Florida following the Hurricane, putting more strain on an already limited affordable housing market in the state. Back in Puerto Rico, citizens who remained are facing a foreclosure epidemic, as around a third of Puerto Rican homeowners are behind on their mortgages.
CRA activities may help to alleviate some of the pain by providing assistance not only to those in the disaster area, but to displaced individuals who have relocated to other states. The joint statement notes that consideration will be given regardless of median income of the census tract or the personal income of the individual. However, more consideration will be given to more responsive activities, especially activities that address the needs of low- and moderate-income areas.
The complete press release may be found on the FDIC website.