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Inactive Financial Institution Letters 

Flood Insurance

FIL-75-95
November 2, 1995

 

TO: CHIEF EXECUTIVE OFFICER
SUBJECT: Proposed Revisions to Rules Governing
Loans in Areas Having Special Flood Hazards (Part 339)

Attached is a copy of an interagency proposal that would expand current requirements for loans in areas having special flood hazards, including the requirements of Part 339 of the FDIC's rules and regulations. The proposal would implement the National Flood Insurance Reform Act of 1994 by:

  • Establishing new escrow requirements for flood insurance premiums;
  • Providing explicit authority for lenders and servicers to
    "force-place" flood insurance if adequate coverage is lacking;
  • Enhancing flood hazard notice requirements; and
  • Authorizing lenders to charge fees for determining if a property is
    located in a flood hazard area.

The proposal was issued by the five federal regulators of depository institutions and by the Farm Credit Administration, which is proposing regulations for the first time to cover institutions under its supervision.

Written comments are due by December 18, 1995. They may be sent to the FDIC according to the instructions on Page 53962 of the attached Federal Register notice or through Internet (COMMENTS@FDIC.GOV).

For more information you may contact the following: Mark Mellon, Senior Attorney in the Regulation and Legislation Section of the FDIC Legal Division (202/898-3854); Ken Baebel, Senior Review Examiner in the Division of Compliance and Consumer Affairs (202/942-3086); or Barbara L. Boehm, Consumer Affairs Specialist in the Division of Compliance and Consumer Affairs (202/942-3631).

Paul L. Sachtleben
Director

Attachment

Distribution: FDIC-Supervised Banks (Commercial and Savings)

Last Updated 07/16/1999 communications@fdic.gov