[Federal Register Volume 59, Number 233 (Tuesday, December 6, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-29959]


[[Page Unknown]]

[Federal Register: December 6, 1994]


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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; Board of 
Governors of the Federal Reserve System; Federal Deposit Insurance 
Corporation; Office of Thrift Supervision, Treasury; and National 
Credit Union Administration.

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 Federal financial institutions 
regulatory 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. 
Expiration dates for certain transactions are set out in the 
SUPPLEMENTARY INFORMATION section.

DATES: This order is effective on December 6, 1994, and expires for 
specific areas on the dates indicated in the SUPPLEMENTARY INFORMATION 
section.

FOR FURTHER INFORMATION CONTACT:

Office of the Comptroller of the Currency (OCC)

    William C. Kerr, National Bank Examiner or Thomas E. Watson, 
National Bank Examiner (202) 874-5170, Office of the Chief National 
Bank Examiner; or Peter C. Liebesman, (202) 874-5300, Assistant 
Director, Bank Activities and Structure Division, 250 E Street, S.W., 
Washington, DC 20219.

Board of Governors of the Federal Reserve System (Board)

    Rhoger H. Pugh, Assistant Director, (202) 728-5883, Stanley B. 
Rediger, Supervisory Financial Analyst, (202) 452-2629, Virginia M. 
Gibbs, Supervisory Financial Analyst, (202) 452-2521, Division of 
Banking Supervision and Regulation; or Deneen Donnley-Evans, Staff 
Attorney, (202) 736-5567, Legal Division. For the hearing impaired 
only, contact Dorothea Thompson, Telecommunications Device for the Deaf 
(TDD), (202) 452-3544, 20th and C Streets, N.W., Washington, DC 20551.

Federal Deposit Insurance Corporation (FDIC)

    Robert F. Miailovich, Associate Director, (202) 898-6918, James D. 
Leitner, Examination Specialist, (202) 898-6790, Division of 
Supervision; or Dirck A. Hargraves, Attorney, (202) 898-7049, Legal 
Division, 550 17th Street, N.W., Washington, DC 20429.

Office of Thrift Supervision, Treasury (OTS)

    William J. Magrini, Project Manager, (202) 906-5744; Diana Garmus, 
Deputy Assistant Director, Corporate Activities, (202) 906-5683; Ellen 
J. Sazzman, Attorney, Regulations and Legislation Division, Chief 
Counsel's Office, (202) 907-7133; 1700 G Street N.W., Washington, DC 
20552.

National Credit Union Administration (NCUA)

    Michael J. McKenna, Office of General Counsel, (703) 518-6540, or 
Herb Yolles, 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 
transactions with respect to real property located in areas in which 
the President has determined, pursuant to section 401 of the Robert T. 
Stafford Disaster Relief and Emergency Assistance Act, 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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    Since October 18, 1994, and continuing, the President has declared 
several areas as Major Disaster Areas in certain Texas counties because 
of the extensive flooding that occurred and is continuing. The agencies 
believe that granting relief from the appraisal requirements for 
certain real estate transactions in all such areas affected by this 
flooding is consistent with the provisions of the DIDRA.
    The agencies have determined that the disruption of real estate 
markets in all such affected areas interferes with the ability of 
depository institutions to obtain appraisals that comply with statutory 
and regulatory requirements and, therefore, may impede institutions in 
making loans and engaging in other transactions that would aid in the 
reconstruction and rehabilitation of the affected area. Accordingly, 
the agencies have determined that recovery from this major disaster 
would be facilitated by excepting transactions involving real estate 
located in the area directly affected by the flooding from the real 
estate appraisal requirements of Title XI of the Financial Institutions 
Reform, Recovery, and Enforcement Act of 1989 (FIRREA) as amended, 12 
U.S.C. 3331 et seq., and regulations promulgated thereto. This has the 
effect of excepting certain transactions from the definition of 
``federally related transactions.''
    The agencies have also determined that safety and soundness would 
not be adversely affected by such exceptions so long as the depository 
institution's records relating to any such excepted transaction clearly 
indicate either that the property involved was directly affected by the 
major disaster or that the transaction would facilitate recovery from 
the disaster and there is a binding commitment to fund the transaction 
within three years after the date the major disaster was declared. In 
addition, the transaction must continue to be subject to review by 
management and by the agencies in the course of examination of the 
institution under normal supervisory standards relating to safety and 
soundness, though the transactions need not comply with the specific 
requirements of Title XI of FIRREA and the agencies' appraisal 
regulations.

Expiration Dates

    Any exceptions provided under the order shall expire not later than 
three years after the date on which the President determines, pursuant 
to 42 U.S.C. 5170, that a major disaster exists in the area. 
Accordingly, exceptions for the major disasters declared due to the 
flooding expire on October 18, 1997. Exceptions for any other counties 
that have been declared major disasters by the President as a result of 
the flooding that began in Texas on or about October 11, 1994, expire 
three years after the date of such declaration.

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 estate located in an area that 
the President has determined, pursuant to 42 U.S.C. 5170, is a major 
disaster area as a result of the October 1994 flooding in Texas, and 
has been designated eligible for Federal assistance by the Federal 
Emergency Management Agency (FEMA);2
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    \2\ The Texas counties affected are listed in the appendix to 
this order. The exception would also include any other such areas 
that the President subsequently declares are major disaster areas as 
a result of the flooding.
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    (2)(a) The real property involved was directly affected by the 
major disaster, or
    (b) The real property involved was not directly affected by the 
major disaster but the institution's records explain how the 
transaction would facilitate recovery from the disaster;
    (3) There is a binding commitment to fund a transaction 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 supporting the property's valuation.

Appendix to Order

    Texas: Angelina, Austin, Bastrop, Brazos, Brazoria, Burleson, 
Chambers, Fayette, Fort Bend, Galveston, Grimes, Hardin, Harris, 
Houston, Jackson, Jasper, Jefferson, Lee, Liberty, Madison, Matagorda, 
Montgomery, Nacagdoches, Orange, Polk, San Augustine, San Jacinto, 
Shelby, Trinity, Tyler, Victoria, Washington, Waller, Walker, Wharton.

    Dated: November 7, 1994.
Eugene A. Ludwig,
Comptroller of the Currency.
    Dated: November 23, 1994.

    By order of the Board of Governors of the Federal Reserve 
System.
William W. Wiles,
Secretary of the Board.
    Dated: November 18, 1994.

Federal Deposit Insurance Corporation.
Robert E. Feldman,
Acting Executive Secretary.
    Dated: November 23, 1994.

    By the Office of Thrift Supervision.
Jonathan L. Fiechter,
Acting Director.
    Dated: November 8, 1994.
Becky Baker,
Secretary of the Board, National Credit Union Administration.
[FR Doc. 94-29959 Filed 12-5-94; 8:45 am]
BILLING CODES OCC, 4810-33-P (20%), BOARD 6210-01-P (20%), FDIC 6714-
01-P (20%), OTS 6720-01-P (20%), NCUA 7535-01-P (20%)