Industry Letter

Clarification on Disaster Assistance CRA Guidelines

November 30, 2005

To the CRA Officer of the Institution Addressed:

In recent weeks, the Banking Department has received numerous inquiries regarding the CRA eligibility of efforts by New York State-chartered banking institutions to assist with the revitalization and stabilization efforts in areas affected by Hurricanes Katrina and Rita. The following information is intended to clarify and reinforce the guidance previously provided by the Department on this issue (copy attached).

On September 1, 2005, the New York State Banking Board adopted emergency revisions to its Community Reinvestment Act regulation (Part 76), effective immediately. As one of several important changes, the Board expanded the definition of "community development" to cover an institution's efforts to revitalize or stabilize "designated disaster areas."

Thus, the Banking Department will look favorably upon a banking institution's efforts to assist in the revitalization or stabilization of a disaster area without regard to the income level of the affected areas or individuals. However, the institution must have already addressed the credit needs of its existing CRA assessment area in a satisfactory manner. In other words, an institution's participation in efforts to revitalize or stabilize a disaster area will be treated as a supplement to, rather than a replacement for, its ongoing efforts to serve the credit needs of its designated CRA assessment area.

At the same time, if victims of an out-of-state disaster are displaced or relocated to geographies that fall within an institution's New York State CRA assessment area, efforts to serve these individuals will receive special consideration by the Department.

In all cases, the Department will give the greatest qualitative consideration to efforts that specifically seek to address the needs of small businesses, small farms, and/or individuals from low- and moderate-income households affected by the disaster. If you have any questions regarding your institution's efforts to assist individuals or geographies affected by a disaster, please do not hesitate to contact Steven Kirchgraber, Director of the Department's Community Reinvestment Monitoring Unit, at (212) 709-3591.

Thank you.

Sincerely,

Edward B. Kramer
Deputy Superintendent of Banks