OCC 2005-36
OCC Bulletin

Subject:      Statement and Order: Hurricanes Katrina and Rita                              
Description:  Real Estate Appraisal Exemptions in Major Disaster
              Areas

Date:         October 14, 2005

TO:  Chief Executive Officers of All National Banks and National
     Bank Operating Subsidiaries, Department and Division Heads,
     and All Examining Personnel

The Office of the Comptroller of the Currency, the Board of
Governors of the Federal Reserve System, the Federal Deposit
Insurance Corporation, the Office of Thrift Supervision, and the
National Credit Union Administration (agencies) jointly published
in the Federal Register on October 14, 2005, the attached
Statement and Order regarding exceptions to regulatory
requirements for appraisals in areas affected by Hurricanes
Katrina and Rita.

Section 2 of the Depository Institutions Disaster Relief Act of
1992 authorizes the agencies to make exceptions to statutory and
regulatory requirements related 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.  The agencies 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:
     
*    The property involved was directly affected by the major
     disaster or the transaction would facilitate recovery from the
     disaster
*    There is a binding commitment to fund the transaction within
     three years after the date the major disaster was declared
*    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 institutions.  Institutions are encouraged to
refer to the Interagency Appraisal and Evaluation Guidelines,
"Evaluation Content," for prudent standards for preparation of
collateral valuations on properties for which appraisals are
exempt.



______________________________
Barbara J. Grunkemeyer
Deputy Comptroller for Credit Risk

Attachment: Statement and Order
            [http://www.occ.treas.gov/fr/fedregister/70fr59987.pdf]