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Financial Institutions Eligible to Receive CRA Consideration for Hurricane Maria Disaster-Recovery Investments

By Liz Lopez

January 30, 2018

 

Last week, the Federal Deposit Insurance Corporation (FDIC), the Federal Reserve Board of Governors (FRB), and the Office of the Comptroller of the Currency (OCC) (collectively, the “Agencies”) issued an interagency statement regarding investments, loans, and services in disaster areas affected by Hurricane Maria.

The Agencies expanded the scope for disaster-recovery activities in Puerto Rico and the U.S. Virgin Islands. Financial institutions that are located outside of Puerto Rico and the U.S. Virgin Islands are now eligible to receive favorable consideration under the Community Reinvestment Act (CRA) regulations for disaster-recovery investments, loans, and services they make to revitalize or stabilize these communities. Such investments may also include assistance to individuals who were displaced by Hurricane Maria, including evacuees relocated to other states. The Agencies issued a similar statement in 2006 after Hurricane Katrina.

CRA has been an important tool to incentivize financial institutions to invest in the communities they serve and to partner with community development financial institutions (CDFIs), community development credit unions, minority-and-women owned financial institutions, and New Market Tax Credit Community Development Entities (NMTC CDEs).

Financial institutions have the tools, partnerships, and incentives to make a significant contribution in the economic recovery efforts of communities impacted by Hurricane Maria. For example, they can make investments to help retain businesses that employ local residents; build essential communitywide infrastructure; and offer housing, financial assistance, and services to individuals in the disaster recovery areas and/or those have been displaced.

Four months after Hurricane Maria, 450,000 Puerto Ricans remain without power; damages are estimated to be more than $85 billion; and over 300,000 residents have moved to Florida, Massachusetts, and New York. 


Liz Lopez


Liz has more than a decade of experience as an advisor and counsel to financial services institutions, non-profit organizations, and Fortune 500 companies. She has leveraged her experience in the public and private sectors to create innovative multi-faceted campaigns, develop bipartisan congressional relationships, and implement corporate social responsibility initiatives. Liz graduated from the University of Chicago and Boston College Law School. She has been featured as a contributor and commentator on community development, economic, and policy issues. You can follow her on Twitter @lizlopezinDC.

 

LEDC Receives Two Federal Awards to Support Entrepreneurs in the Greater DC and Baltimore Regions

 

Washington, D.C. - According to an Aspen Institute report (2015) regarding the racial wealth gap, the lack of wealth in Latino and African-American communities is related to the lack of businesses and financial assets. On September 27th, 2016, the U.S. Department of the Treasury announced its awardees for its Community Development Financial Institution Fund (CDFI Fund) program. The Latino Economic Development Center (LEDC) was one of  three organizations in DC and one of two operating in Baltimore who received this award. LEDC will be receiving $500,000 from the Treasury Department to support its small business micro-lending efforts in the DMV region. 

The same week, on September 30th, 2016, LEDC also learned that it had been awarded $400,000 from the Department of Health and Human Service's (HHS) Community Economic Development (CED) program to provide local DC businesses with financing in order to create jobs with living wages for low-income DC residents.   

This is a historic time for LEDC as it is the first time it has secured two federal grants of this size in one year, and the first time it has been awarded Community Economic Development funding through HHS. "We are so excited and honored to have been selected as 2016 CDFI Fund and CED recipients. The new businesses and jobs that will result from LEDC's financing efforts will help low income residents advance economically, strengthen their financial self-sufficiency, and contribute to the revitalization of Washington, D.C and Baltimore City, MD neighborhoods," said LEDC Executive Director, Marla Bilonick.


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About the CDFI Fund:
Since its creation in 1994, the CDFI Fund has awarded more than $2.2 billion to CDFIs, community development organizations, and financial institutions through the CDFI Program, the NACA Program, the Bank Enterprise Award Program, the Capital Magnet Fund, and the Financial Education and Counseling Pilot Program. To learn more about the CDFI Fund and its programs, please view the  Fact Sheet or visit the CDFI Fund's website at  www.cdfifund.gov.  
 
 
About Community Economic Development:
The Community Economic Development (CED) program is a Department of Health and Human Services, Office of Community Services (OCS) initiative designed to address the economic needs of low-income individuals and families through the creation of sustainable business development and employment opportunities.

Learn more about  CED.
Published in Press Releases