Navigate Up
Sign In

Agencies Request Comment on Proposed Flood Insurance Rule

 ​


Joint Release
Board of Governors of the Federal Reserve System
Farm Credit Administration
Federal Deposit Insurance Corporation
National Credit Union Administration
Office of Comptroller of the Currency

​For Immediate Release

​October 11, 2013 

 

Agencies Request Comment on Proposed Flood Insurance Rule

 

Five federal regulatory agencies are issuing a joint notice of proposed rulemaking to amend regulations pertaining to loans secured by property located in special flood hazard areas. The proposed rule would implement certain provisions of the Biggert-Waters Flood Insurance Reform Act of 2012 (Biggert-Waters) with respect to private flood insurance, the escrow of flood insurance payments, and the forced-placement of flood insurance. Separate from the agencies’ joint proposal, Biggert-Waters also mandated other changes to the National Flood Insurance Program.

The proposed rule would require that regulated lending institutions accept private flood insurance as defined in Biggert-Waters to satisfy the mandatory purchase requirements and solicits comment on whether the agencies should adopt additional regulations on the acceptance of flood insurance policies issued by private insurers.  In addition, the proposal would require regulated lending institutions to escrow payments and fees for flood insurance for any new or outstanding loans secured by residential improved real estate or a mobile home, not including business, agricultural and commercial loans, unless the institutions qualify for the statutory exception.

The proposal includes new and revised sample notice forms and clauses concerning the availability of private flood insurance coverage and the escrow requirement.  Finally, the proposal would clarify that regulated lending institutions have the authority to charge a borrower for the cost of force-placed flood insurance coverage beginning on the date on which the borrower’s coverage lapsed or became insufficient and would stipulate the circumstances under which a lender must terminate force-placed flood insurance coverage and refund payments to a borrower.

The agencies’ proposal would implement only the provisions of Biggert-Waters relating to the mandatory purchase of flood insurance over which the agencies have jurisdiction.  Accordingly, regulated lending institutions should review Biggert-Waters for further information about revisions to the flood insurance statutes that will not be implemented through this rulemaking.

The proposed rule is being issued by the Board of Governors of the Federal Reserve System, the Farm Credit Administration, the Federal Deposit Insurance Corporation, the National Credit Union Administration and the Office of the Comptroller of the Currency.

The public will have until December 10, 2013, to review and comment on most of the proposal.  However, comments related to the proposed Paperwork Reduction Act analysis will be due 60 days after the rule is published in the Federal Register.

Attachment:


# # #
 

Media Contacts:

Federal Reserve
Barbara Hagenbaugh
202-452-2955
FCA
FDIC
Mike Stokke
Greg Hernandez
703-883-4056
202-898-6984
NCUA
John Fairbanks
703-518-6336
OCC
Stephanie Collins
202-649-6870

 


NCUA is the independent federal agency created by the U.S. Congress to regulate, charter and supervise federal credit unions. With the backing of the full faith and credit of the U.S. Government, NCUA operates and manages the National Credit Union Share Insurance Fund, insuring the deposits of more than 97 million account holders in all federal credit unions and the overwhelming majority of state-chartered credit unions. At MyCreditUnion.gov and Pocket Cents, NCUA also educates the public on consumer protection and financial literacy issues..

--NCUA--

National Credit Union Administration

Office of Public & Congressional Affairs

703.518.6330
pacamail@ncua.gov

Contacts:

John Fairbanks
Office: 703.518.6336
jfairbanks@ncua.gov

Ben C. Hardaway
Office: 703.518.6333
Mobile: 703.298.5223 bhardaway@ncua.gov

Kenzie Snowden
Office: 703.518.6334
ksnowden@ncua.gov

"Protecting credit unions and the consumers who own them through effective regulation"