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Financial Services Law Insights and Observations

Banking agencies issue final rule on private flood insurance

Federal Issues Federal Reserve OCC FDIC NCUA Farm Credit Administration Flood Insurance National Flood Insurance Act Flood Disaster Protection Act National Flood Insurance Program

Federal Issues

On February 12, the Federal Reserve Board, Farm Credit Administration, FDIC, National Credit Union Administration, and the OCC issued a joint final rule amending regulations governing loans secured by properties in special flood hazard areas to implement the provisions of the Biggert-Waters Flood Insurance Reform Act of 2012 concerning private flood insurance. As previously covered by InfoBytes, the provisions, among other things, require regulated lending institutions to accept policies that meet the statutory definition of “private flood insurance,” and clarify that lending institutions may choose to accept private policies that do not meet the statutory criteria for “private flood insurance,” provided the policies meet certain criteria and the lending institutions document that the policies offer “sufficient protection for a designated loan, consistent with general safety and soundness principles.” The final rule takes effect July 1.

(See also FDIC FIL-8-2019, NCUA press release, and OCC press release.)