WASHINGTON — Federal bank regulators said Thursday they would give favorable Community Reinvestment Act consideration to banks outside Puerto Rico and the U.S. Virgin Islands for activities meant to revitalize the areas hit hard by Hurricane Maria.
The storm ravaged the Caribbean Sea in September, leaving much of Puerto Rico and the Virgin Islands without power for months. But the regulators said they were taking steps to recognize contributions to the recovery made by banks anywhere in the nation.
“Widespread devastation from Hurricane Maria occurred in areas that are not connected to the U.S. mainland, and the resulting economic impact and other effects may extend to other parts of the United States,” the Federal Reserve, Office of the Comptroller of the Currency and Federal Deposit Insurance Corp. said in a press release.
“The agencies therefore have determined that it is appropriate to give favorable consideration to community development activities that help to revitalize or stabilize these disaster areas by financial institutions located anywhere in the United States, provided that they have been responsive to the community development needs and opportunities of their own CRA assessment areas,” the release continued.
Banks are regularly assessed by their lead regulators on their compliance with the Community Reinvestment Act, which requires banks to provide banking services and loans to low- and moderate-income borrowers within their assessment areas. Those areas are determined by a bank’s footprint of physical branches. Banks that are deemed to have less-than-satisfactory CRA ratings can be blocked from engaging in merger and acquisition activity by their regulators.
More than 450,000 households affected by Hurricane Maria still lack electricity four months after the storm struck. Florida alone has faced an influx of an estimated 300,000 refugees from Puerto Rico in the wake of the disaster.
The regulators said that they will expand CRA’s applicability in the case of disaster relief to include “disaster areas or affected individuals regardless of the median income of the census tract or the personal value of the individual,” suggesting that banks could receive CRA credit for making loans to individuals affected by the storm even if they might be wealthier or be rebuilding in wealthier areas than what would normally qualify for CRA consideration.