Katrina and Rita CRA Provisions Extended

The regulators have extended the period during which loans, investments, and services in the areas affected by Hurricanes Katrina and Rita in 2005 will qualify for Community Reinvestment Act (CRA) credit. The initial designation of the Gulf Coast area as eligible for CRA credit was slated to expire now (36 months after the storms), but has been extended for a second 36-month period.

Consumer Advisory Council to Meet

The Fed’s Consumer Advisory Council will meet October 23 to discuss the Housing and Economic Recovery Act, proposed rules on credit cards and overdraft services, and the Home Mortgage Disclosure Act.

Reserve Requirements Adjusted

The Fed has adjusted the reserve requirement exemption amount and the low-reserve tranche for 2009. The first $10.3 million in net transaction accounts (up from $9.3 million in 2008) will be exempt from reserve requirements next year. A three percent reserve ratio will be assessed on net transaction accounts over $10.3 million up to and including $44.4 million (up from $43.9 million in 2008). A 10 percent reserve ratio will be assessed on net transaction accounts in excess of $44.4 million.

Consumer Loan Delinquencies

Despite continued economic stress, consumer loan delinquencies rose only slightly during the second quarter of 2008, according to the American Bankers Association’s Consumer Credit Delinquency Bulletin. Several consumer loan categories saw delinquencies fall. ABA Chief Economist James Chessen noted that the federal economic stimulus payments helped to keep delinquencies in check.