The Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Farm Credit Administration, and the National Credit Union Administration (collectively, the “Agencies”) have jointly released proposed new and revised Interagency Questions and Answers Regarding Flood Insurance. The Interagency Questions and Answers, which were last updated in 2011, provide information addressing technical flood insurance related compliance issues. Comments are being accepted regarding the proposed changes until September 4, 2020.
The jointly proposed updates add new guidance related to changes in flood insurance requirements under the agencies’ 2015 joint final rule regarding loans in special flood hazard areas. The 2015 final rule implemented provisions of the Biggert-Waters Flood Insurance Reform Act of 2012 (“Biggert-Waters Act”) and the Homeowner Flood Insurance Affordability Act of 2014, except for provisions related to private flood insurance.
The proposed new questions and answers address several compliance areas, including the escrow of flood insurance premiums, the detached structure exemption to the mandatory purchase of flood insurance requirement, and force placement procedures. Additional proposed changes would reorganize existing questions and answers into new categories by subject to enhance the clarity for users and make it easier to find information.
Under the Biggert-Waters Act, the Agencies were also mandated to issue a rule to direct lending institutions to accept “private flood insurance” and to notify borrowers of the availability of private flood insurance. Regulations that implemented these provisions of the Biggert-Waters Act were finalized in February 2019. The Agencies plan to issue proposed Interagency Questions and Answers related to the private flood insurance rule at a later date.
UPDATE:
The Agencies have extended the comment period on the proposed revisions to the Interagency Questions and Answers Regarding Flood Insurance until November 3, 2020 due to "challenges associated with the COVID-19 pandemic." To see the Federal Register notice, click here.
