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Months after the deadly and destructive wildfires on the Hawaiian Island of Maui, the NCUA and three other federal agencies announced a temporary pause on certain appraisal requirements for real estate-related transactions.
A notice published Tuesday in the Federal Register and signed by the NCUA, Office of the Comptroller of the Currency, the Federal Reserve Board and the Federal Deposit Insurance Corporation stated the agencies are exercising their authority "to grant temporary exceptions to the FIRREA (Financial Institutions Reform, Recovery, and Enforcement Act) appraisal requirements for real estate-related financial transactions, provided certain criteria are met, in an area in the State of Hawaii following the major disaster declared by President Biden as a result of wildfires."
The wildfires broke out in August of last year, decimating the town of Lahaina and killing at least 101 people. Several credit union branches were in the path of the fires that burned for about four days.
According to the temporary exceptions notice, "This temporary action is expected to allow banks and credit unions to work with families and businesses without obtaining an appraisal. Banks and credit unions will still be required to determine that the value of the real estate supports the institution's decision to enter into the transaction.
"As a result of this temporary action, financial institutions will be better able to lend or modify loans in areas where wildfire damage has made appraisals challenging to obtain and reduce loan processing times, helping to facilitate recovery from the disaster."
President Joe Biden declared Maui a major disaster area on Aug. 10, 2023 and this temporary action will remain in place until Aug. 10, 2026.
"The agencies have determined that the disruption of real estate markets in the area designated as adversely affected by the major disaster interferes with the ability of depository institutions to obtain appraisals that comply with Title XI statutory and regulatory requirements," the action read. "Further, 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 area. Accordingly, the agencies have determined that recovery from this major disaster would be facilitated by exempting certain transactions involving real estate located in the area designated as adversely affected by the wildfires from the real estate appraisal requirements of Title XI of FIRREA and its implementing regulations."
The agencies stated they will monitor real estate lending practices "to help ensure the transactions are being originated in a safe and sound manner."
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Michael Ogden
Editor-in-Chief at CU Times. To connect, email at [email protected]. As Editor-in-Chief of CU Times since 2016, Michael Ogden has led the editorial team in all aspects of content strategy and execution, including the creation of the publication’s exclusive and proprietary research database of the credit union industry’s economic landscape. Under Michael’s leadership, CU Times has successfully shifted to an all-digital editorial product with new focuses on the payments, fraud, lending and regulatory beats. Most recently, he introduced a data-focused editorial product for subscribers that breaks down credit union issues into hard data, allowing for a deeper and more factual narrative for readers. In 2024, he launched the "Shared Accounts With CU Times" podcast, which offers a fresh, inside-the-newsroom perspective through interviews with leaders from the credit union industry and the regulatory world. He dives into pressing credit union issues, while revealing the personalities working behind-the-scenes to push the credit union world forward. His background includes years as a radio and TV anchor/reporter and a public relations and digital/social media manager, where he covered the food and music industries, as well as cooperatives and credit unions. Over the years, he has launched numerous exclusive video and podcast series, including a successful series of interactive backstage interviews with musicians at music festivals, showcasing his social media and live streaming production skills.
