[Federal Register Volume 70, Number 198 (Friday, October 14, 2005)]
[Rules and Regulations]
[Pages 59987-59988]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-20583]



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Rules and Regulations
                                                Federal Register
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Federal Register / Vol. 70, No. 198 / Friday, October 14, 2005 / 
Rules and Regulations

[[Page 59987]]



DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency

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

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.

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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 October 14, 2005 and expires for 
specific areas on the dates indicated in the SUPPLEMENTARY INFORMATION 
section.

FOR FURTHER INFORMATION CONTACT:

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, DC 
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.
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    \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.
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    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'') 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\
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    \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).''
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    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.

[[Page 59988]]

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 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\
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    \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.
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    (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.

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

    Dated: October 5, 2005.
John C. Dugan,
Comptroller of the Currency.
    By order of the Board of Governors of the Federal Reserve 
System.

    Dated: October 4, 2005.
Jennifer J. Johnson,
Secretary of the Board.
    By order of the Board of Directors.

    Dated at Washington, DC, this 4th day of October, 2005.

Federal Deposit Insurance Corporation.
Robert E. Feldman,
Executive Secretary.
    Dated: October 6, 2005.

    By the Office of Thrift Supervision.
John M. Reich,
Director.
    By order of the National Credit Union Administration.

    Dated: October 4, 2005.
Mary F. Rupp,
Secretary of the Board.

[FR Doc. 05-20583 Filed 10-13-05; 8:45 am]
BILLING CODE 6714-01-P; 4810-33-P; 6210-01-P; 6720-01-P; 7535-01-P