DEPARTMENT OF THE TREASURY 

Office of the Comptroller of the Currency 

[Docket No. ] 

12 CFR Part 34 

FEDERAL RESERVE SYSTEM 

12 CFR Part 225 

FEDERAL DEPOSIT INSURANCE CORPORATION 

12 CFR Part 323 

DEPARTMENT OF THE TREASURY 

Office of Thrift Supervision 

[No. ] 

12 CFR Part 564 

NATIONAL CREDIT UNION ADMINISTRATION 

12 CFR Part 722 

Real Estate Appraisal Exceptions in Major Disaster Areas 

AGENCIES: Office of the Comptroller of the Currency, Treasury Department (OCC); 

Board of Governors of the Federal Reserve System (Board); Federal Deposit Insurance 

Corporation (FDIC); Office of Thrift Supervision, Treasury Department (OTS); and National 

Credit Union Administration (NCUA), collectively referred to as “the Agencies.” 

ACTION: Statement and Order; temporary exceptions. 

SUMMARY: Section 2 of the Depository Institutions Disaster Relief Act of 1992 (DIDRA) 

authorizes the Agencies to make exceptions to statutory and regulatory requirements 

relating to appraisals for certain transactions. The exceptions are available for transactions that 

involve real property in major disaster areas when the exceptions would facilitate recovery from 

the disaster and would be consistent with safety and soundness. In this notice, the Agencies 

grant exceptions for certain real estate-related transactions in areas affected by Hurricanes 

Katrina and Rita. The expiration dates for the exceptions are set out in the Supplementary 

Information section. 

DATES: This order is effective on [INSERT DATE OF PUBLICATION IN THE 

FEDERAL REGISTER] and expires for specific areas on the dates indicated in the 

SUPPLEMENTARY INFORMATION section. 

FOR FURTHER INFORMATION CONTACT: 
2

OCC 

Dena G. Patel, Credit Risk Specialist, (202) 874-5170, Office of the Chief National Bank 

Examiner; or Sue Auerbach, Counsel, (202) 874-5300, Chief Counsel's Office, 250 E Street, SW, 

Washington, DC 20219. 

Board 

Virginia M. Gibbs, Senior Supervisory Financial Analyst, (202) 452-2521, Division of Banking 

Supervision and Regulation; or April Snyder, Attorney, (202) 452-3099, Legal Division. Mail: 

Board of Governors of the Federal Reserve System, 20th Street and Constitution Avenue, NW, 

Washington, DC, 20551. 

FDIC 

James D. Leitner, Examination Specialist, (202) 898-6790, Division of Supervision and 

Consumer Protection; or Mark G. Flanigan, Counsel, (202) 898-7426, Legal Division, 550 17th Street, 

NW., Washington, D. C., 20429. 

OTS 

Deborah Merkle, Project Manager, Credit Policy, (202) 906-5688; Karen Osterloh, Special 

Counsel, Regulation and Legislation Division, Chief Counsel's Office, (202) 906-6639, Office of 

Thrift Supervision, 1700 G Street, NW, Washington, DC, 20552. 

NCUA 

Regina Metz, Staff Attorney, Office of General Counsel, (703) 518-6540; or Anthony 

LaCreta, Deputy Director, Office of Examination and Insurance, (703) 518-6360, 1775 Duke 

Street, Alexandria, VA,. 22314. 

SUPPLEMENTARY INFORMATION: 

Statement 

Section 2 of DIDRA, 12 U.S.C. §3352, authorizes the Agencies to make exceptions to 

statutory and regulatory appraisal requirements for certain transactions. These exceptions are 

available for real property located in areas that the President has determined, pursuant to 

42 U.S.C. §5170, that a major disaster exists, provided that the exception would facilitate 

recovery from the major disaster and is consistent with safety and soundness.1

 Such exceptions 

expire not later than three years after the date of the President's determination that a major 

disaster exists in the area. 

On August 29, and September 24, 2005, the President declared several areas in certain 

Alabama, Mississippi, and Texas counties and Louisiana parishes as Major Disaster Areas and 

individual assistance was authorized by the Federal Emergency Management Agency (“FEMA”) 

 

1 The agencies must make the exception no later than 30 months after the date on which the 

President determines that a major disaster exists in the area. 
3

as a result of the extensive damage caused by Hurricanes Katrina and Rita. The Agencies 

believe that granting relief from the appraisal requirements for real estate transactions in certain 

designated disaster areas is consistent with the provisions of DIDRA.2

The Agencies have determined that the disruption of real estate markets in those 

FEMA-designated disaster areas interferes with the ability of depository institutions to obtain 

appraisals that comply with statutory and regulatory requirements. Therefore, the Agencies have 

determined that the disruption may impede institutions in making loans and engaging in other 

transactions that would aid in the reconstruction and rehabilitation of the affected areas. 

Accordingly, the Agencies have determined that recovery from these two major disasters 

would be facilitated by excepting certain transactions involving real estate located in the areas 

directly affected by the hurricanes from the real estate appraisal requirements of 

Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 

(FIRREA), as amended, and the regulations promulgated thereunder. This order has the 

effect of excepting the transactions specified below from the definition of “federally related 

transactions” in Title XI of FIRREA and the agencies’ appraisal regulations, and thereby 

from the statutory and regulatory real estate appraisal requirements for such transactions. 

The Agencies also have determined that the exceptions are consistent with safety and 

soundness, subject to the requirement that the depository institution’s records relating to any 

excepted transaction appropriately document the following: (1) the property involved was 

directly affected by the major disaster or the transaction would facilitate recovery from the 

disaster; (2) there is a binding commitment to fund the transaction that is made within three years 

after the date the major disaster was declared; and (3) the value of the real property supports the 

institution’s decision to enter into the transaction. In addition, the transaction must continue to 

be subject to review by management and by the Agencies in the course of examinations of the 

institution. 

Expiration Dates 

Exceptions provided under this order expire not later than three years after the date on 

which the President determines, pursuant to section 401 of the Robert T. Stafford Disaster Relief 

and Emergency Assistance Act, 42 U.S.C. §5170 (DREAA), that a major disaster exists in the 

area. Accordingly, exceptions for the major disasters declared due to Hurricane Katrina expire 

on August 29, 2008, in Alabama, Mississippi and Louisiana; and exceptions for the major 

disasters declared due to Hurricane Rita expire on September 24, 2008, in Louisiana and Texas. 

Order 

In accordance with section 2 of DIDRA, relief is hereby granted from the provisions 

 

2

 Those counties and parishes designated by FEMA as receiving “Individual and Public 

Assistance (all categories)” and “Individual and Public Assistance (Categories A and B).” 
4

of Title XI of FIRREA and the agencies’ appraisal regulations for any real estate-related 

financial transaction that requires the services of an appraiser under those provisions, 

provided that: 

(1) The transaction involves real property located in an area that the President has 

determined, pursuant to section 401 of DREAA, is a major disaster area as a result of Hurricane 

Katrina (August 2005) in Alabama, Louisiana, and Mississippi; or as a result of Hurricane Rita 

(September 2005) in Louisiana and Texas, and has been designated eligible for federal assistance 

by FEMA;3

(2)(a) The real property involved was directly affected by the major disaster; 

or 

 (2)(b) The real property involved was not directly affected by the major disaster but 

the transaction would facilitate recovery from the disaster; 

(3) There is a binding commitment to fund a transaction that is made within three 

years after the date the major disaster was declared by the President; and 

(4) The institution retains in its files, for examiner review, appropriate 

documentation indicating that the requirements of Items (1)-(3) above are met and 

supporting the valuation of the real property involved in the transaction. 

 

3

 Those areas designated by FEMA as receiving “Individual and Public Assistance (all 

categories)” and “Individual and Public Assistance (Categories A and B)” in Alabama, 

Mississippi, and Texas counties and Louisiana parishes, as listed in the appendix to this order. 
5

Appendix 

Counties and parishes designated by FEMA as receiving “Individual and Public Assistance (all 

categories)” and “Individual and Public Assistance (Categories A and B)” 

Hurricane Katrina 

Alabama: Baldwin, Choctaw, Clarke, Greene, Hale, Mobile, Pickens, Sumter, Tuscaloosa 

and Washington 

Louisiana: Acadia, Ascension, Assumption, Calcasieu, Cameron, East Baton Rouge, East 

Feliciana, Iberia, Iberville, Jefferson, Jefferson Davis, Lafayette, Lafourche, 

Livingston, Orleans, Pointe Coupee, Plaquemines, St. Bernard, St. Charles, St. 

Helena, St. James, St. John the Baptist, St. Mary, St. Martin, St. Tammany, 

Tangipahoa, Terrebonne, Vermilion, Washington, West Baton Rouge, and West 

Feliciana 

Mississippi: Adams, Amite, Attala, Choctaw, Claiborne, Clarke, Copiah, Covington, Forrest, 

Franklin, George, Greene, Hancock, Harrison, Hinds, Jackson, Jasper, Jefferson, 

Jefferson Davis, Jones, Kemper, Lamar, Lauderdale, Lawrence, Leake, Lincoln, 

Lowndes, Madison, Marion, Neshoba, Newton, Noxubee, Oktibbeha, Pearl River, 

Perry, Pike, Rankin, Scott, Simpson, Smith, Stone, Walthall, Warren, Wayne, 

Wilkinson, Winston, and Yazoo. 

Hurricane Rita 

Louisiana: Acadia, Allen, Beauregard, Calcasieu, Cameron, Iberia, Jefferson Davis, 

Lafayette, Lafourche, St. Mary, Terrebonne, and Vermilion 

Texas: Chambers, Galveston, Hardin, Jasper, Jefferson, Liberty, Newton, Orange, and 

Tyler 
6

[THIS SIGNATURE PAGE RELATES TO THE JOINT STATEMENT AND ORDER; 

TEMPORARY EXCEPTION ENTITLED “REAL ESTATE APPRAISAL 

EXCEPTIONS IN MAJOR DISASTER AREAS”] 

Dated:______________________________ 

____________________________________ 

John C. Dugan 

Comptroller of the Currency 
7

[This signature page relates to the Joint Statement and Order; temporary exception entitled “Real 

Estate Appraisal Exceptions in Major Disaster Areas”] 

By order of the Board of Governors of the Federal Reserve System 

 

Date: October 4, 2005 (signed) 

Jennifer J. Johnson 

 Secretary of the Board 
8

[THIS SIGNATURE PAGE PERTAINS TO THE JOINT FINAL STATEMENT AND 

ORDER; TEMPORARY EXCEPTION ENTITLED “Real Estate Appraisal Exceptions in 

Major Disaster Areas”] 

By order of the Board of Directors. 

Dated at Washington, D.C., this ______ day of _____________, 2005. 

 FEDERAL DEPOSIT INSURANCE CORPORATION 

 ______________________________ 

 Robert E. Feldman 

 Executive Secretary 

 (SEAL) 
9

[THIS SIGNATURE PAGE PERTAINS TO THE JOINT FINAL STATEMENT AND ORDER 

CONCERNING THE WAIVER OF APPRAISAL REQUIREMENTS.] 

Dated: 

 By the Office of Thrift Supervision, 

 ______________________________ 

 John M. Reich, 

Director. 
10

[This signature page relates to the Joint Statement and Order; temporary exception entitled “Real 

Estate Appraisal Exceptions in Major Disaster Areas”] 

By order of the National Credit Union Administration 

_______________ ___________________________ 

Date Mary F. Rupp 

 Secretary of the Board