Loans in Areas Having Special Flood Hazards, 75742-75746 [2014-29761]
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Federal Register / Vol. 79, No. 244 / Friday, December 19, 2014 / Rules and Regulations
PART 140—FINANCIAL PROTECTION
REQUIREMENTS AND INDEMNITY
AGREEMENTS
49. The authority citation for part 140
continues to read as follows:
■
Authority: Atomic Energy Act secs. 161,
170, 223, 234 (42 U.S.C. 2201, 2210, 2273,
2282); Energy Reorganization Act secs. 201,
as amended, 202 (42 U.S.C. 5841, 5842);
Government Paperwork Elimination Act sec.
1704 (44 U.S.C. 3504 note); Energy Policy Act
of 2005 Pub. L. 109–58, 119 Stat. 594 (2005).
50. In part 140, wherever it may occur,
remove the phrase ‘‘Director, Office of
Federal and State Materials and
Environmental Management Programs,’’.
■
PART 150—EXEMPTIONS AND
CONTINUED REGULATORY
AUTHORITY IN AGREEMENT STATES
AND IN OFFSHORE WATERS UNDER
SECTION 274
51. The authority citation for part 150
continues to read as follows:
■
Authority: Atomic Energy Act sec. 161,
181, 223, 234 (42 U.S.C. 2201, 2021, 2231,
2273, 2282); Energy Reorganization Act sec.
201 (42 U.S.C. 5841); Government Paperwork
Elimination Act sec. 1704 (44 U.S.C. 3504
note); Energy Policy Act of 2005, Pub. L.
109–58, 119 Stat. 594 (2005).
Sections 150.3, 150.15, 150.15a, 150.31,
150.32 also issued under Atomic Energy Act
secs. 11e(2), 81, 83, 84 (42 U.S.C. 2014e(2),
2111, 2113, 2114).
Section 150.14 also issued under Atomic
Energy Act sec. 53 (42 U.S.C. 2073).
Section 150.15 also issued under Nuclear
Waste Policy Act secs. 135 (42 U.S.C. 10155).
Section 150.17a also issued under Atomic
Energy Act sec. 122 (42 U.S.C. 2152).
Section 150.30 also issued under Atomic
Energy Act sec. 234 (42 U.S.C. 2282).
52. In part 150, wherever it may occur,
the phrase in the left column in the
following table is removed and the
phrase in the right column is added in
its place.
■
Remove
Add
Office of Federal and State Materials and Environmental Management
Programs.
Division of Fuel Cycle Safety and Safeguards ........................................
Dated at Rockville, Maryland, this 9th day
of December, 2014.
For the Nuclear Regulatory Commission.
Roy P. Zimmerman,
Acting Executive Director for Operations.
[FR Doc. 2014–29664 Filed 12–18–14; 8:45 am]
BILLING CODE 7590–01–P
FEDERAL DEPOSIT INSURANCE
CORPORATION
Office of Nuclear Material Safety and Safeguards.
Division of Fuel Cycle Safety, Safeguards, and Environmental Review.
The final rule is effective on
January 20, 2015.
FOR FURTHER INFORMATION CONTACT:
Mark Mellon, Counsel, Consumer
Compliance Section (202) 898–3884,
Legal Division; or John Jackwood,
Senior Policy Analyst (202) 898–3991,
Division of Depositor and Consumer
Protection, Federal Deposit Insurance
Corporation, 550 17th Street NW.,
Washington, DC 20429.
SUPPLEMENTARY INFORMATION:
DATES:
12 CFR Parts 339 and 391
I. Background
RIN 3064–AE03
A. The Dodd-Frank Act
The Dodd-Frank Act 1 provided for a
substantial reorganization of the
regulation of State and Federal savings
associations and their holding
companies. Beginning July 21, 2011, the
transfer date established by section 311
of the Dodd-Frank Act, codified at 12
U.S.C. 5411, (‘‘Transfer Date’’), the
powers, duties, and functions formerly
performed by the OTS were respectively
divided among the FDIC, as to State
savings associations, the Office of the
Comptroller of the Currency (‘‘OCC’’), as
to Federal savings associations, and the
Board of Governors of the Federal
Reserve System (‘‘FRB’’), as to savings
and loan holding companies. Section
316(b) of the Dodd-Frank Act, codified
at 12 U.S.C. 5414(b), provides the
manner of treatment for all orders,
resolutions, determinations, regulations,
and advisory materials that had been
issued, made, prescribed, or allowed to
become effective by the OTS. The
section provides that if such materials
were in effect on the day before the
Loans in Areas Having Special Flood
Hazards
Federal Deposit Insurance
Corporation (FDIC).
ACTION: Final rule.
AGENCY:
The Federal Deposit
Insurance Corporation (‘‘FDIC’’) is
adopting a final rule to rescind and
remove regulations entitled ‘‘Loans in
Areas Having Flood Hazards’’ and to
amend regulations entitled ‘‘Loans in
Areas Having Flood Hazards.’’ The final
rule will integrate the flood insurance
regulations for State nonmember banks
and State savings associations in
accordance with the requirements of the
Dodd-Frank Wall Street Reform and
Consumer Protection Act (the ‘‘DoddFrank Act’’). The integration of the
regulations was originally proposed as
part of an interagency joint notice of
proposed rulemaking issued in October
2013 pursuant to the Biggert-Waters
Flood Insurance Reform Act of 2012 (the
BW Act). The FDIC has decided to
integrate the flood insurance regulations
by means of an individual final rule.
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SUMMARY:
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1 Public Law 111–203, 124 Stat. 1376 (2010)
(codified at 12 U.S.C. 5301 et seq.).
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Transfer Date, they continue to be in
effect and are enforceable by or against
the appropriate successor agency until
they are modified, terminated, set aside,
or superseded in accordance with
applicable law by such successor
agency, by any court of competent
jurisdiction, or by operation of law.
Section 316(c) of the Dodd-Frank Act,
codified at 12 U.S.C. 5414(c), further
directed the FDIC and the OCC to
consult with one another and to publish
a list of the continued OTS regulations
which would be enforced by the FDIC
and the OCC, respectively. On June 14,
2011, the FDIC’s Board of Directors
approved a ‘‘List of OTS Regulations to
be Enforced by the OCC and the FDIC
Pursuant to the Dodd-Frank Wall Street
Reform and Consumer Protection Act.’’
This list was published by the FDIC and
the OCC as a Joint Notice in the Federal
Register on July 6, 2011.2
Although section 312(b)(2)(B)(i)(II) of
the Dodd-Frank Act, codified at 12
U.S.C. 5412(b)(2)(B)(i)(II), granted the
OCC rulemaking authority relating to
both State and Federal savings
associations, the Dodd-Frank Act did
not affect the FDIC’s existing authority
to issue regulations under the Federal
Deposit Insurance Act (‘‘FDI Act’’) and
other laws as the ‘‘appropriate Federal
banking agency’’ or under similar
statutory terminology. Section 312(c) of
the Dodd-Frank Act amended the
definition of ‘‘appropriate Federal
banking agency’’ contained in section
3(q) of the FDI Act, 12 U.S.C. 1813(q),
to add State savings associations to the
list of entities for which the FDIC is
designated as the ‘‘appropriate Federal
2 76
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FR 39247 (July 6, 2011).
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banking agency.’’ As a result, when the
FDIC acts as the designated
‘‘appropriate Federal banking agency,’’
or under similar terminology, for State
savings associations, as it does here, the
FDIC is authorized to issue, modify and
rescind regulations involving such
associations, as well as for State
nonmember banks and insured branches
of foreign banks.
Pursuant to this authority, the FDIC’s
Board of Directors reissued and redesignated certain transferring
regulations of the former OTS on June
14, 2011, as noted earlier. These
transferred OTS regulations were
published as new FDIC regulations in
the Federal Register on August 5, 2011.3
When it republished the transferred
OTS regulations as new FDIC
regulations, the FDIC specifically noted
that its staff would evaluate the
transferred OTS rules and might later
recommend incorporating the
transferred OTS regulations into other
FDIC rules, amending them, or
rescinding them, as appropriate.
B. The BW Act
The BW Act,4 signed into law by the
President on July 6, 2012, significantly
revised Federal flood insurance statutes.
Pursuant to the BW Act, the FDIC along
with the OCC, the FRB, the Farm Credit
Administration, and the National Credit
Union Administration published a
Notice of Proposed Rulemaking on
October 30, 2013 (the ‘‘NPR’’).5 Among
other topics, the NPR discussed the OCC
and FDIC’s proposals to integrate their
flood insurance regulations for national
banks and Federal savings associations
and for State non-member banks and
State savings associations, respectively,
pursuant to the previously discussed
requirements of the Dodd-Frank Act.
Specifically, the OCC proposed to add
language to its flood insurance
regulation for national banks, 12 CFR
part 22, to make it applicable to both
national banks and Federal savings
associations, and to remove its flood
insurance regulation for Federal savings
associations, 12 CFR part 172. Similarly,
the FDIC proposed to add language to 12
CFR part 339, its flood regulation for
State nonmember banks, to make it
applicable to both State nonmember
banks and State savings associations
and to remove its flood insurance
regulation for State savings associations,
12 CFR part 391 subpart D. The NPR
noted that Parts 22, 172, 339, and 391
subpart D, are nearly identical and
contain no substantive differences, as
3 76
FR 47652 (Aug. 5, 2011).
Law 112–141, 126 Stat. 916 (2012).
5 78 FR 65108.
4 Public
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they were originally adopted through an
interagency rulemaking process.
II. Comments
The NPR had a sixty-day comment
period, which closed on December 29,
2013. No comments were received on
the FDIC’s proposed integration of its
flood insurance rules. Consequently this
final rule pertaining solely to the
integration of FDIC and OTS flood
insurance rules is adopted basically as
proposed in the interagency NPR.
III. Explanation of the Final Rule
As discussed in the NPR, part 391,
subpart D is almost identical to part 339,
and the designation of part 339 as the
single regulation for depository
institutions supervised by the FDIC will
serve to streamline the FDIC’s rules and
eliminate unnecessary regulations. To
that effect, the final rule removes and
rescinds 12 CFR part 391, subpart D in
its entirety.
Consistent with the NPR, the final
rule also amends part 339 by deleting
the definition of ‘‘bank,’’ inserting a
definition of ‘‘FDIC-supervised
institution’’ that includes both nonmember banks and State savings
associations, and replacing the term
‘‘bank’’ with the term ‘‘FDIC-supervised
institution’’ throughout the rule. The
amendments make it plain that the rule
applies to both non-member banks and
State savings associations.
IV. Administrative Law Matters
A. Paperwork Reduction Act
Pursuant to the NPR, the FDIC will
rescind and remove from its regulations
12 CFR part 391, subpart D. This rule
was transferred with only nominal
changes to the FDIC from the OTS when
the OTS was abolished by Title III of the
Dodd-Frank Act. Part 391, subpart D is
redundant and duplicative of the FDIC’s
rule at part 339 regarding loans in areas
having special flood hazards. Removing
part 391, subpart D and adding a
definition of FDIC-supervised institution
to part 339 will not involve any new
collections of information pursuant to
the Paperwork Reduction Act (44 U.S.C.
3501 et seq.). Consequently, no
information collection has been
submitted to the Office of Management
and Budget for review.
B. The Regulatory Flexibility Act
The Regulatory Flexibility Act, 5
U.S.C. 601, et seq. (RFA), requires that
each federal agency either (1) certify
that a proposed rule would not, if
adopted in final form, have a significant
economic impact on a substantial
number of small entities, or (2) prepare
an initial regulatory flexibility analysis
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of the rule and publish the analysis for
comment. The proposal to integrate the
FDIC’s flood insurance regulations
makes no substantive changes to the
requirements set forth pursuant to that
rule. It instead would only merge two
nearly identical regulations, thus
reducing redundancy and the potential
for confusion as to which regulation
applies. On this basis, the FDIC certifies
that the present rule revision will not
have a significant impact on a
substantial number of small entities,
within the meaning of those terms as
used in the RFA.
C. The Economic Growth and
Regulatory Paperwork Reduction Act
Under section 2222 of the Economic
Growth and Regulatory Paperwork
Reduction Act of 1996 (‘‘EGRPRA’’), the
FDIC is required to review all of its
regulations, at least once every 10 years,
in order to identify any outdated or
otherwise unnecessary regulations
imposed on insured depository
institutions.6 The FDIC completed the
last comprehensive review of its
regulations under EGRPRA in 2006 and
is commencing the next decennial
review, which is expected to be
completed by 2016. The NPR solicited
comments on the proposed rescission of
part 391, subpart D and amendments to
part 339. No comments on this issue
were received. Upon review, the FDIC
does not believe that part 339, as
amended by the Final Rule, imposes any
outdated or unnecessary regulatory
requirements on any insured depository
institutions.
D. Plain Language
Section 722 of the Gramm-LeachBliley Act, 12 U.S.C. 4809, requires each
Federal banking agency to use plain
language in all of its proposed and final
rules published after January 1, 2000.
Although the FDIC did not receive any
comments, the FDIC sought to present
the final rule in a simple and
straightforward manner.
List of Subjects
12 CFR Part 339
Flood insurance, Reporting and
recordkeeping requirements, Savings
associations.
12 CFR Part 391
Savings associations.
Authority and Issuance
For the reasons set forth in the
Supplementary Information, the Federal
Deposit Insurance Corporation amends
Parts 339 and 391 of Chapter III of Title
6 Pub.
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L. 104–208, 110 Stat. 3009 (Sept. 30, 1996).
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Federal Register / Vol. 79, No. 244 / Friday, December 19, 2014 / Rules and Regulations
12, Code of Federal Regulations as
follows:
■ 1. Part 339 is revised to read as
follows:
PART 339—LOANS IN AREAS HAVING
SPECIAL FLOOD HAZARDS
Sec.
339.1 Authority, purpose, and scope.
339.2 Definitions.
339.3 Requirement to purchase flood
insurance where available.
339.4 Exemptions.
339.5 Escrow requirement.
339.6 Required use of standard flood hazard
determination form.
339.7 Forced placement of flood insurance.
339.8 Determination fees.
339.9 Notice of special flood hazards and
availability of federal disaster relief
assistance.
339.10 Notice of servicer’s identity.
Appendix A to Part 339—Sample Form of
Notice of Special Flood Hazards and
Availability of Federal Disaster Relief
Assistance
Authority: 12 U.S.C. 1462, 1462a, 1463,
1464, 1819 (Tenth), 5412(b)(2)(C) and 42
U.S.C. 4012a, 4104a, 4104b, 4106, and 4128.
§ 339.1
Authority, purpose, and scope.
(a) Authority. This part is issued
pursuant to 12 U.S.C. 1462, 1462a, 1463,
1464, 1819 (Tenth), 5412(b)(2)(C) and 42
U.S.C. 4012a, 4104a, 4104b, 4106, and
4128.
(b) Purpose. The purpose of this part
is to implement the requirements of the
National Flood Insurance Act of 1968
and the Flood Disaster Protection Act of
1973, as amended (42 U.S.C. 4001–
4129).
(c) Scope. This part, except for
§§ 339.6 and 339.8, applies to loans
secured by buildings or mobile homes
located or to be located in areas
determined by the Director of the
Federal Emergency Management Agency
to have special flood hazards. Sections
339.6 and 339.8 apply to loans secured
by buildings or mobile homes,
regardless of location.
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§ 339.2
Definitions.
(a) Act means the National Flood
Insurance Act of 1968, as amended (42
U.S.C. 4001–4129).
(b) Building means a walled and
roofed structure, other than a gas or
liquid storage tank, that is principally
above ground and affixed to a
permanent site, and a walled and roofed
structure while in the course of
construction, alteration, or repair.
(c) Community means a state or a
political subdivision of a State that has
zoning and building code jurisdiction
over a particular area having special
flood hazards.
(d) Designated loan means a loan
secured by a building or mobile home
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that is located or to be located in a
special flood hazard area in which flood
insurance is available under the Act.
(e) Director of FEMA means the
Director of the Federal Emergency
Management Agency.
(f) FDIC-supervised institution means
any insured depository institution for
which the Federal Deposit Insurance
Corporation is the appropriate Federal
banking agency pursuant to section 3(g)
of the Federal Deposit Insurance Act, 12
U.S.C. 1813(g).
(g) Mobile home means a structure,
transportable in one or more sections,
that is built on a permanent chassis and
designed for use with or without a
permanent foundation when attached to
the required utilities. The term mobile
home does not include a recreational
vehicle. For purposes of this part, the
term mobile home means a mobile home
on a permanent foundation. The term
mobile home includes a manufactured
home as that term is used in the NFIP.
(h) NFIP means the National Flood
Insurance Program authorized under the
Act.
(i) Residential improved real estate
means real estate upon which a home or
other residential building is located or
to be located.
(j) Servicer means the person
responsible for:
(1) Receiving any scheduled, periodic
payments from a borrower under the
terms of a loan, including amounts for
taxes, insurance premiums, and other
charges with respect to the property
securing the loan; and
(2) Making payments of principal and
interest and any other payments from
the amounts received from the borrower
as may be required under the terms of
the loan.
(k) Special flood hazard area means
the land in the flood plain within a
community having at least a one percent
chance of flooding in any given year, as
designated by the Director of FEMA.
(l) Table funding means a settlement
at which a loan is funded by a
contemporaneous advance of loan funds
and an assignment of the loan to the
person advancing the funds.
§ 339.3 Requirement to purchase flood
insurance where available.
(a) In general. An FDIC-supervised
institution shall not make, increase,
extend, or renew any designated loan
unless the building or mobile home and
any personal property securing the loan
is covered by flood insurance for the
term of the loan. The amount of
insurance must be at least equal to the
lesser of the outstanding principal
balance of the designated loan or the
maximum limit of coverage available for
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the particular type of property under the
Act. Flood insurance coverage under the
Act is limited to the overall value of the
property securing the designated loan
minus the value of the land on which
the property is located.
(b) Table funded loans. An FDICsupervised institution that acquires a
loan from a mortgage broker or other
entity through table funding shall be
considered to be making a loan for the
purpose of this part.
§ 339.4
Exemptions.
The flood insurance requirement
prescribed by § 339.3 does not apply
with respect to:
(a) Any state-owned property covered
under a policy of self-insurance
satisfactory to the Director of FEMA,
who publishes and periodically revises
the list of states falling within this
exemption; or
(b) Property securing any loan with an
original principal balance of $5,000 or
less and a repayment term of one year
or less.
§ 339.5
Escrow requirement.
If an FDIC-supervised institution
requires the escrow of taxes, insurance
premiums, fees, or any other charges for
a loan secured by residential improved
real estate or a mobile home that is
made, increased, extended, or renewed
on or after October 1, 1996, the FDICsupervised institution shall also require
the escrow of all premiums and fees for
any flood insurance required under
§ 339.3. The FDIC-supervised
institution, or a servicer acting on behalf
of the FDIC-supervised institution, shall
deposit the flood insurance premiums
on behalf of the borrower in an escrow
account. This escrow account will be
subject to escrow requirements adopted
pursuant to section 10 of the Real Estate
Settlement Procedures Act of 1974 (12
U.S.C. 2609) (RESPA), which generally
limits the amount that may be
maintained in escrow accounts for
certain types of loans and requires
escrow account statements for those
accounts, only if the loan is otherwise
subject to RESPA. Following receipt of
a notice from the Director of FEMA or
other provider of flood insurance that
premiums are due, the FDIC-supervised
institution, or a servicer acting on behalf
of the FDIC-supervised institution, shall
pay the amount owed to the insurance
provider from the escrow account by the
date when such premiums are due.
§ 339.6 Required use of standard flood
hazard determination form.
(a) Use of form. An FDIC-supervised
institution shall use the standard flood
hazard determination form developed
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by the Director of FEMA when
determining whether the building or
mobile home offered as collateral
security for a loan is or will be located
in a special flood hazard area in which
flood insurance is available under the
Act. The standard flood hazard
determination form may be used in a
printed, computerized, or electronic
manner. An FDIC-supervised institution
may obtain the standard flood hazard
determination form by written request
to FEMA, P.O. Box 2012, Jessup, MD
20794–2012.
(b) Retention of form. An FDICsupervised institution shall retain a
copy of the completed standard flood
hazard determination form, in either
hard copy or electronic form, for the
period of time the FDIC-supervised
institution owns the loan.
§ 339.7 Forced placement of flood
insurance.
If an FDIC-supervised institution, or a
servicer acting on behalf of the FDICsupervised institution, determines, at
any time during the term of a designated
loan, that the building or mobile home
and any personal property securing the
designated loan is not covered by flood
insurance or is covered by flood
insurance in an amount less than the
amount required under § 339.3, then the
FDIC-supervised institution or its
servicer shall notify the borrower that
the borrower should obtain flood
insurance, at the borrower’s expense, in
an amount at least equal to the amount
required under § 339.3, for the
remaining term of the loan. If the
borrower fails to obtain flood insurance
within 45 days after notification, then
the FDIC-supervised institution or its
servicer shall purchase insurance on the
borrower’s behalf. The FDIC-supervised
institution or its servicer may charge the
borrower for the cost of premiums and
fees incurred in purchasing the
insurance.
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§ 339.8
Determination fees.
(a) General. Notwithstanding any
federal or state law other than the Flood
Disaster Protection Act of 1973, as
amended (42 U.S.C. 4001—4129), any
FDIC-supervised institution, or a
servicer acting on behalf of the FDICsupervised institution, may charge a
reasonable fee for determining whether
the building or mobile home securing
the loan is located or will be located in
a special flood hazard area. A
determination fee may also include, but
is not limited to, a fee for life-of-loan
monitoring.
(b) Borrower fee. The determination
fee authorized by paragraph (a) of this
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section may be charged to the borrower
if the determination:
(1) Is made in connection with a
making, increasing, extending, or
renewing of the loan that is initiated by
the borrower;
(2) Reflects the Director of FEMA’s
revision or updating of floodplain areas
or flood-risk zones;
(3) Reflects the Director of FEMA’s
publication of a notice or compendium
that:
(i) Affects the area in which the
building or mobile home securing the
loan is located; or
(ii) By determination of the Director of
FEMA, may reasonably require a
determination whether the building or
mobile home securing the loan is
located in a special flood hazard area; or
(4) Results in the purchase of flood
insurance coverage by the lender or its
servicer on behalf of the borrower under
§ 339.7.
(c) Purchaser or transferee fee. The
determination fee authorized by
paragraph (a) of this section may be
charged to the purchaser or transferee of
a loan in the case of the sale or transfer
of the loan.
§ 339.9 Notice of special flood hazards and
availability of federal disaster relief
assistance.
(a) Notice requirement. When an
FDIC-supervised institution makes,
increases, extends, or renews a loan
secured by a building or a mobile home
located or to be located in a special
flood hazard area, the FDIC-supervised
institution shall mail or deliver a
written notice to the borrower and to the
servicer in all cases whether or not flood
insurance is available under the Act for
the collateral securing the loan.
(b) Contents of notice. The written
notice must include the following
information:
(1) A warning, in a form approved by
the Director of FEMA, that the building
or the mobile home is or will be located
in a special flood hazard area;
(2) A description of the flood
insurance purchase requirements set
forth in section 102(b) of the Flood
Disaster Protection Act of 1973, as
amended (42 U.S.C. 4012a(b));
(3) A statement, where applicable,
that flood insurance coverage is
available under the NFIP and may also
be available from private insurers; and
(4) A statement whether federal
disaster relief assistance may be
available in the event of damage to the
building or mobile home caused by
flooding in a federally-declared disaster.
(c) Timing of notice. The FDICsupervised institution shall provide the
notice required by paragraph (a) of this
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75745
section to the borrower within a
reasonable time before the completion
of the transaction, and to the servicer as
promptly as practicable after the FDICsupervised institution provides notice to
the borrower and in any event no later
than the time the FDIC-supervised
institution provides other similar
notices to the servicer concerning
hazard insurance and taxes. Notice to
the servicer may be made electronically
or may take the form of a copy of the
notice to the borrower.
(d) Record of receipt. The FDICsupervised institution shall retain a
record of the receipt of the notices by
the borrower and the servicer for the
period of time the FDIC-supervised
institution owns the loan.
(e) Alternate method of notice. Instead
of providing the notice to the borrower
required by paragraph (a) of this section,
an FDIC-supervised institution may
obtain satisfactory written assurance
from a seller or lessor that, within a
reasonable time before the completion
of the sale or lease transaction, the seller
or lessor has provided such notice to the
purchaser or lessee. The FDICsupervised institution shall retain a
record of the written assurance from the
seller or lessor for the period of time the
FDIC-supervised institution owns the
loan.
(f) Use of prescribed form of notice.
An FDIC-supervised institution will be
considered to be in compliance with the
requirement for notice to the borrower
of this section by providing written
notice to the borrower containing the
language presented in appendix A to
this part within a reasonable time before
the completion of the transaction. The
notice presented in appendix A to this
part satisfies the borrower notice
requirements of the Act.
§ 339.10
Notice of servicer’s identity.
(a) Notice requirement. When an
FDIC-supervised institution makes,
increases, extends, renews, sells, or
transfers a loan secured by a building or
mobile home located or to be located in
a special flood hazard area, the FDICsupervised institution shall notify the
Director of FEMA (or the Director of
FEMA’s designee) in writing of the
identity of the servicer of the loan. The
Director of FEMA has designated the
insurance provider to receive the FDICsupervised institution’s notice of the
servicer’s identity. This notice may be
provided electronically if electronic
transmission is satisfactory to the
Director of FEMA’s designee.
(b) Transfer of servicing rights. The
FDIC-supervised institution shall notify
the Director of FEMA (or the Director of
FEMA’s designee) of any change in the
E:\FR\FM\19DER1.SGM
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Federal Register / Vol. 79, No. 244 / Friday, December 19, 2014 / Rules and Regulations
servicer of a loan described in paragraph
(a) of this section within 60 days after
the effective date of the change. This
notice may be provided electronically if
electronic transmission is satisfactory to
the Director of FEMA’s designee. Upon
any change in the servicing of a loan
described in paragraph (a) of this
section, the duty to provide notice
under this paragraph (b) shall transfer to
the transferee servicer.
tkelley on DSK3SPTVN1PROD with RULES
Appendix A to Part 339—Sample Form
of Notice of Special Flood Hazards and
Availability of Federal Disaster Relief
Assistance
We are giving you this notice to inform you
that:
The building or mobile home securing the
loan for which you have applied is or will
be located in an area with special flood
hazards.
The area has been identified by the
Director of the Federal Emergency
Management Agency (FEMA) as a special
flood hazard area using FEMA’s Flood
Insurance Rate Map or the Flood Hazard
Boundary Map for the following community:
llll. This area has at least a one percent
(1%) chance of a flood equal to or exceeding
the base flood elevation (a 100-year flood) in
any given year. During the life of a 30-year
mortgage loan, the risk of a 100-year flood in
a special flood hazard area is 26 percent
(26%).
Federal law allows a lender and borrower
jointly to request the Director of FEMA to
review the determination of whether the
property securing the loan is located in a
special flood hazard area. If you would like
to make such a request, please contact us for
further information. llllllllll
The community in which the property
securing the loan is located participates in
the National Flood Insurance Program
(NFIP). Federal law will not allow us to make
you the loan that you have applied for if you
do not purchase flood insurance. The flood
insurance must be maintained for the life of
the loan. If you fail to purchase or renew
flood insurance on the property, federal law
authorizes and requires us to purchase the
flood insurance for you at your expense.
• Flood insurance coverage under the
NFIP may be purchased through an insurance
agent who will obtain the policy either
directly through the NFIP or through an
insurance company that participates in the
NFIP. Flood insurance also may be available
from private insurers that do not participate
in the NFIP.
• At a minimum, flood insurance
purchased must cover the lesser of:
(1) The outstanding principal balance of
the loan; or
(2) the maximum amount of coverage
allowed for the type of property under the
NFIP. Flood insurance coverage under the
NFIP is limited to the overall value of the
property securing the loan minus the value
of the land on which the property is located.
• Federal disaster relief assistance (usually
in the form of a low-interest loan) may be
available for damages incurred in excess of
VerDate Sep<11>2014
17:14 Dec 18, 2014
Jkt 235001
your flood insurance if your community’s
participation in the NFIP is in accordance
with NFIP requirements.
llllllllllFlood insurance
coverage under the NFIP is not available for
the property securing the loan because the
community in which the property is located
does not participate in the NFIP. In addition,
if the non-participating community has been
identified for at least one year as containing
a special flood hazard area, properties
located in the community will not be eligible
for federal disaster relief assistance in the
event of a federally-declared flood disaster.
PART 391—FORMER OFFICE OF
THRIFT SUPERVISION REGULATIONS
2. The authority citation for Part 391
is revised to read as follows:
■
Authority: 12 U.S.C. 1819.
Subpart A also issued under 12 U.S.C.
1462a; 1463; 1464; 1828; 1831p-1; 1881–
1884; 15 U.S.C. 1681w; 15 U.S.C. 6801; 6805.
Subpart B also issued under 12 U.S.C.
1462a; 1463; 1464; 1828; 1831p-1; 1881–
1884; 15 U.S.C.1681w; 15 U.S.C. 6801; 6805.
Subpart C also issued under 12 U.S.C.
1462a; 1463; 1464; 1828; 1831p-1; and 1881–
1884; 15 U.S.C. 1681m; 1681w.
Subpart E also issued under 12 U.S.C.
1467a; 1468; 1817; 1831i.
Subpart D—[Removed and Reserved]
3. Remove and reserve Subpart D
consisting of §§ 391.30 through 391.39
and the Appendix to Subpart D.
■
Dated at Washington, DC, this 16th day of
December 2014.
By Order of the Board of Directors, Federal
Deposit Insurance Corporation.
Robert E. Feldman,
Executive Secretary.
[FR Doc. 2014–29761 Filed 12–18–14; 8:45 am]
BILLING CODE P
NATIONAL CREDIT UNION
ADMINISTRATION
12 CFR Parts 701 and 722
RIN 3133–AE36
Appraisals—Availability to Applicants
and Requirements for Transactions
Involving an Existing Extension of
Credit
National Credit Union
Administration (NCUA).
ACTION: Final rule.
AGENCY:
As part of NCUA’s Regulatory
Modernization Initiative, the NCUA
Board (Board) is revising two of NCUA’s
regulations regarding appraisals. In
response to a recent amendment to the
Consumer Financial Protection Bureau’s
(CFPB) Regulation B, the Board is
eliminating from NCUA’s regulations
SUMMARY:
PO 00000
Frm 00012
Fmt 4700
Sfmt 4700
the now duplicative requirement that
federal credit unions (FCUs) make
available, to any requesting member, a
copy of the appraisal used in connection
with that member’s application for a
loan secured by a first lien on a
dwelling. Also, the Board is amending
NCUA’s appraisal regulations by
expanding the current exemption for
certain transactions involving an
existing extension of credit. More
specifically, under the expanded
exemption, a federally insured credit
union (FICU) will be permitted to
refinance or modify a real estate-related
loan held by the FICU, without having
to obtain another appraisal, if there is no
advancement of new monies or if there
is adequate collateral protection even
with the advancement of new monies.
Lastly, the Board is making a minor
technical amendment to the definition
of the term ‘‘application.’’
DATES: This rule is effective January 20,
2015.
FOR FURTHER INFORMATION CONTACT:
Pamela Yu, Senior Staff Attorney, Office
of General Counsel, National Credit
Union Administration, 1775 Duke
Street, Alexandria, Virginia 22314–3428
or telephone (703) 518–6593.
SUPPLEMENTARY INFORMATION:
I. Background and Proposal
II. Final Rule
III. Regulatory Procedures
I. Background and Proposal
A. Background
Each year, NCUA reviews one-third of
its regulations for substance and to
ensure they are clear, current, and
appropriate in scope. NCUA notifies the
public of those regulations under review
so that the public may have an
opportunity to provide comments on
those regulations.
In 2013, NCUA reviewed part 722,
along with several other parts of
NCUA’s regulations.1 Part 722 sets forth
the appraisal requirements for federallyrelated transactions involving real
estate. The appraisal requirements in
part 722 are generally equivalent to the
appraisal requirements of the other
federal financial regulatory agencies.2
However, NCUA received numerous
comments during the public comment
period requesting a specific change to
§ 722.3(a)(5) to better align NCUA’s
appraisal requirements with those of the
1 As part of the 2013 regulatory review process,
NCUA also reviewed parts 711, 712, 713, 714, 715,
716, 717, 721, 723, 724, 725, 740, 741, 745, and 747
of NCUA’s regulations.
2 For purposes of this rulemaking, these agencies
are the Board of Governors of the Federal Reserve
System, Federal Deposit Insurance Corporation, and
Office of the Comptroller of Currency.
E:\FR\FM\19DER1.SGM
19DER1
]]>Agencies
[Federal Register Volume 79, Number 244 (Friday, December 19, 2014)]
[Rules and Regulations]
[Pages 75742-75746]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-29761]
=======================================================================
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FEDERAL DEPOSIT INSURANCE CORPORATION
12 CFR Parts 339 and 391
RIN 3064-AE03
Loans in Areas Having Special Flood Hazards
AGENCY: Federal Deposit Insurance Corporation (FDIC).
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Federal Deposit Insurance Corporation (``FDIC'') is
adopting a final rule to rescind and remove regulations entitled
``Loans in Areas Having Flood Hazards'' and to amend regulations
entitled ``Loans in Areas Having Flood Hazards.'' The final rule will
integrate the flood insurance regulations for State nonmember banks and
State savings associations in accordance with the requirements of the
Dodd-Frank Wall Street Reform and Consumer Protection Act (the ``Dodd-
Frank Act''). The integration of the regulations was originally
proposed as part of an interagency joint notice of proposed rulemaking
issued in October 2013 pursuant to the Biggert-Waters Flood Insurance
Reform Act of 2012 (the BW Act). The FDIC has decided to integrate the
flood insurance regulations by means of an individual final rule.
DATES: The final rule is effective on January 20, 2015.
FOR FURTHER INFORMATION CONTACT: Mark Mellon, Counsel, Consumer
Compliance Section (202) 898-3884, Legal Division; or John Jackwood,
Senior Policy Analyst (202) 898-3991, Division of Depositor and
Consumer Protection, Federal Deposit Insurance Corporation, 550 17th
Street NW., Washington, DC 20429.
SUPPLEMENTARY INFORMATION:
I. Background
A. The Dodd-Frank Act
The Dodd-Frank Act \1\ provided for a substantial reorganization of
the regulation of State and Federal savings associations and their
holding companies. Beginning July 21, 2011, the transfer date
established by section 311 of the Dodd-Frank Act, codified at 12 U.S.C.
5411, (``Transfer Date''), the powers, duties, and functions formerly
performed by the OTS were respectively divided among the FDIC, as to
State savings associations, the Office of the Comptroller of the
Currency (``OCC''), as to Federal savings associations, and the Board
of Governors of the Federal Reserve System (``FRB''), as to savings and
loan holding companies. Section 316(b) of the Dodd-Frank Act, codified
at 12 U.S.C. 5414(b), provides the manner of treatment for all orders,
resolutions, determinations, regulations, and advisory materials that
had been issued, made, prescribed, or allowed to become effective by
the OTS. The section provides that if such materials were in effect on
the day before the Transfer Date, they continue to be in effect and are
enforceable by or against the appropriate successor agency until they
are modified, terminated, set aside, or superseded in accordance with
applicable law by such successor agency, by any court of competent
jurisdiction, or by operation of law.
---------------------------------------------------------------------------
\1\ Public Law 111-203, 124 Stat. 1376 (2010) (codified at 12
U.S.C. 5301 et seq.).
---------------------------------------------------------------------------
Section 316(c) of the Dodd-Frank Act, codified at 12 U.S.C.
5414(c), further directed the FDIC and the OCC to consult with one
another and to publish a list of the continued OTS regulations which
would be enforced by the FDIC and the OCC, respectively. On June 14,
2011, the FDIC's Board of Directors approved a ``List of OTS
Regulations to be Enforced by the OCC and the FDIC Pursuant to the
Dodd-Frank Wall Street Reform and Consumer Protection Act.'' This list
was published by the FDIC and the OCC as a Joint Notice in the Federal
Register on July 6, 2011.\2\
---------------------------------------------------------------------------
\2\ 76 FR 39247 (July 6, 2011).
---------------------------------------------------------------------------
Although section 312(b)(2)(B)(i)(II) of the Dodd-Frank Act,
codified at 12 U.S.C. 5412(b)(2)(B)(i)(II), granted the OCC rulemaking
authority relating to both State and Federal savings associations, the
Dodd-Frank Act did not affect the FDIC's existing authority to issue
regulations under the Federal Deposit Insurance Act (``FDI Act'') and
other laws as the ``appropriate Federal banking agency'' or under
similar statutory terminology. Section 312(c) of the Dodd-Frank Act
amended the definition of ``appropriate Federal banking agency''
contained in section 3(q) of the FDI Act, 12 U.S.C. 1813(q), to add
State savings associations to the list of entities for which the FDIC
is designated as the ``appropriate Federal
[[Page 75743]]
banking agency.'' As a result, when the FDIC acts as the designated
``appropriate Federal banking agency,'' or under similar terminology,
for State savings associations, as it does here, the FDIC is authorized
to issue, modify and rescind regulations involving such associations,
as well as for State nonmember banks and insured branches of foreign
banks.
Pursuant to this authority, the FDIC's Board of Directors reissued
and re-designated certain transferring regulations of the former OTS on
June 14, 2011, as noted earlier. These transferred OTS regulations were
published as new FDIC regulations in the Federal Register on August 5,
2011.\3\ When it republished the transferred OTS regulations as new
FDIC regulations, the FDIC specifically noted that its staff would
evaluate the transferred OTS rules and might later recommend
incorporating the transferred OTS regulations into other FDIC rules,
amending them, or rescinding them, as appropriate.
---------------------------------------------------------------------------
\3\ 76 FR 47652 (Aug. 5, 2011).
---------------------------------------------------------------------------
B. The BW Act
The BW Act,\4\ signed into law by the President on July 6, 2012,
significantly revised Federal flood insurance statutes. Pursuant to the
BW Act, the FDIC along with the OCC, the FRB, the Farm Credit
Administration, and the National Credit Union Administration published
a Notice of Proposed Rulemaking on October 30, 2013 (the ``NPR'').\5\
Among other topics, the NPR discussed the OCC and FDIC's proposals to
integrate their flood insurance regulations for national banks and
Federal savings associations and for State non-member banks and State
savings associations, respectively, pursuant to the previously
discussed requirements of the Dodd-Frank Act. Specifically, the OCC
proposed to add language to its flood insurance regulation for national
banks, 12 CFR part 22, to make it applicable to both national banks and
Federal savings associations, and to remove its flood insurance
regulation for Federal savings associations, 12 CFR part 172.
Similarly, the FDIC proposed to add language to 12 CFR part 339, its
flood regulation for State nonmember banks, to make it applicable to
both State nonmember banks and State savings associations and to remove
its flood insurance regulation for State savings associations, 12 CFR
part 391 subpart D. The NPR noted that Parts 22, 172, 339, and 391
subpart D, are nearly identical and contain no substantive differences,
as they were originally adopted through an interagency rulemaking
process.
---------------------------------------------------------------------------
\4\ Public Law 112-141, 126 Stat. 916 (2012).
\5\ 78 FR 65108.
---------------------------------------------------------------------------
II. Comments
The NPR had a sixty-day comment period, which closed on December
29, 2013. No comments were received on the FDIC's proposed integration
of its flood insurance rules. Consequently this final rule pertaining
solely to the integration of FDIC and OTS flood insurance rules is
adopted basically as proposed in the interagency NPR.
III. Explanation of the Final Rule
As discussed in the NPR, part 391, subpart D is almost identical to
part 339, and the designation of part 339 as the single regulation for
depository institutions supervised by the FDIC will serve to streamline
the FDIC's rules and eliminate unnecessary regulations. To that effect,
the final rule removes and rescinds 12 CFR part 391, subpart D in its
entirety.
Consistent with the NPR, the final rule also amends part 339 by
deleting the definition of ``bank,'' inserting a definition of ``FDIC-
supervised institution'' that includes both non-member banks and State
savings associations, and replacing the term ``bank'' with the term
``FDIC-supervised institution'' throughout the rule. The amendments
make it plain that the rule applies to both non-member banks and State
savings associations.
IV. Administrative Law Matters
A. Paperwork Reduction Act
Pursuant to the NPR, the FDIC will rescind and remove from its
regulations 12 CFR part 391, subpart D. This rule was transferred with
only nominal changes to the FDIC from the OTS when the OTS was
abolished by Title III of the Dodd-Frank Act. Part 391, subpart D is
redundant and duplicative of the FDIC's rule at part 339 regarding
loans in areas having special flood hazards. Removing part 391, subpart
D and adding a definition of FDIC-supervised institution to part 339
will not involve any new collections of information pursuant to the
Paperwork Reduction Act (44 U.S.C. 3501 et seq.). Consequently, no
information collection has been submitted to the Office of Management
and Budget for review.
B. The Regulatory Flexibility Act
The Regulatory Flexibility Act, 5 U.S.C. 601, et seq. (RFA),
requires that each federal agency either (1) certify that a proposed
rule would not, if adopted in final form, have a significant economic
impact on a substantial number of small entities, or (2) prepare an
initial regulatory flexibility analysis of the rule and publish the
analysis for comment. The proposal to integrate the FDIC's flood
insurance regulations makes no substantive changes to the requirements
set forth pursuant to that rule. It instead would only merge two nearly
identical regulations, thus reducing redundancy and the potential for
confusion as to which regulation applies. On this basis, the FDIC
certifies that the present rule revision will not have a significant
impact on a substantial number of small entities, within the meaning of
those terms as used in the RFA.
C. The Economic Growth and Regulatory Paperwork Reduction Act
Under section 2222 of the Economic Growth and Regulatory Paperwork
Reduction Act of 1996 (``EGRPRA''), the FDIC is required to review all
of its regulations, at least once every 10 years, in order to identify
any outdated or otherwise unnecessary regulations imposed on insured
depository institutions.\6\ The FDIC completed the last comprehensive
review of its regulations under EGRPRA in 2006 and is commencing the
next decennial review, which is expected to be completed by 2016. The
NPR solicited comments on the proposed rescission of part 391, subpart
D and amendments to part 339. No comments on this issue were received.
Upon review, the FDIC does not believe that part 339, as amended by the
Final Rule, imposes any outdated or unnecessary regulatory requirements
on any insured depository institutions.
---------------------------------------------------------------------------
\6\ Pub. L. 104-208, 110 Stat. 3009 (Sept. 30, 1996).
---------------------------------------------------------------------------
D. Plain Language
Section 722 of the Gramm-Leach-Bliley Act, 12 U.S.C. 4809, requires
each Federal banking agency to use plain language in all of its
proposed and final rules published after January 1, 2000. Although the
FDIC did not receive any comments, the FDIC sought to present the final
rule in a simple and straightforward manner.
List of Subjects
12 CFR Part 339
Flood insurance, Reporting and recordkeeping requirements, Savings
associations.
12 CFR Part 391
Savings associations.
Authority and Issuance
For the reasons set forth in the Supplementary Information, the
Federal Deposit Insurance Corporation amends Parts 339 and 391 of
Chapter III of Title
[[Page 75744]]
12, Code of Federal Regulations as follows:
0
1. Part 339 is revised to read as follows:
PART 339--LOANS IN AREAS HAVING SPECIAL FLOOD HAZARDS
Sec.
339.1 Authority, purpose, and scope.
339.2 Definitions.
339.3 Requirement to purchase flood insurance where available.
339.4 Exemptions.
339.5 Escrow requirement.
339.6 Required use of standard flood hazard determination form.
339.7 Forced placement of flood insurance.
339.8 Determination fees.
339.9 Notice of special flood hazards and availability of federal
disaster relief assistance.
339.10 Notice of servicer's identity.
Appendix A to Part 339--Sample Form of Notice of Special Flood
Hazards and Availability of Federal Disaster Relief Assistance
Authority: 12 U.S.C. 1462, 1462a, 1463, 1464, 1819 (Tenth),
5412(b)(2)(C) and 42 U.S.C. 4012a, 4104a, 4104b, 4106, and 4128.
Sec. 339.1 Authority, purpose, and scope.
(a) Authority. This part is issued pursuant to 12 U.S.C. 1462,
1462a, 1463, 1464, 1819 (Tenth), 5412(b)(2)(C) and 42 U.S.C. 4012a,
4104a, 4104b, 4106, and 4128.
(b) Purpose. The purpose of this part is to implement the
requirements of the National Flood Insurance Act of 1968 and the Flood
Disaster Protection Act of 1973, as amended (42 U.S.C. 4001-4129).
(c) Scope. This part, except for Sec. Sec. 339.6 and 339.8,
applies to loans secured by buildings or mobile homes located or to be
located in areas determined by the Director of the Federal Emergency
Management Agency to have special flood hazards. Sections 339.6 and
339.8 apply to loans secured by buildings or mobile homes, regardless
of location.
Sec. 339.2 Definitions.
(a) Act means the National Flood Insurance Act of 1968, as amended
(42 U.S.C. 4001-4129).
(b) Building means a walled and roofed structure, other than a gas
or liquid storage tank, that is principally above ground and affixed to
a permanent site, and a walled and roofed structure while in the course
of construction, alteration, or repair.
(c) Community means a state or a political subdivision of a State
that has zoning and building code jurisdiction over a particular area
having special flood hazards.
(d) Designated loan means a loan secured by a building or mobile
home that is located or to be located in a special flood hazard area in
which flood insurance is available under the Act.
(e) Director of FEMA means the Director of the Federal Emergency
Management Agency.
(f) FDIC-supervised institution means any insured depository
institution for which the Federal Deposit Insurance Corporation is the
appropriate Federal banking agency pursuant to section 3(g) of the
Federal Deposit Insurance Act, 12 U.S.C. 1813(g).
(g) Mobile home means a structure, transportable in one or more
sections, that is built on a permanent chassis and designed for use
with or without a permanent foundation when attached to the required
utilities. The term mobile home does not include a recreational
vehicle. For purposes of this part, the term mobile home means a mobile
home on a permanent foundation. The term mobile home includes a
manufactured home as that term is used in the NFIP.
(h) NFIP means the National Flood Insurance Program authorized
under the Act.
(i) Residential improved real estate means real estate upon which a
home or other residential building is located or to be located.
(j) Servicer means the person responsible for:
(1) Receiving any scheduled, periodic payments from a borrower
under the terms of a loan, including amounts for taxes, insurance
premiums, and other charges with respect to the property securing the
loan; and
(2) Making payments of principal and interest and any other
payments from the amounts received from the borrower as may be required
under the terms of the loan.
(k) Special flood hazard area means the land in the flood plain
within a community having at least a one percent chance of flooding in
any given year, as designated by the Director of FEMA.
(l) Table funding means a settlement at which a loan is funded by a
contemporaneous advance of loan funds and an assignment of the loan to
the person advancing the funds.
Sec. 339.3 Requirement to purchase flood insurance where available.
(a) In general. An FDIC-supervised institution shall not make,
increase, extend, or renew any designated loan unless the building or
mobile home and any personal property securing the loan is covered by
flood insurance for the term of the loan. The amount of insurance must
be at least equal to the lesser of the outstanding principal balance of
the designated loan or the maximum limit of coverage available for the
particular type of property under the Act. Flood insurance coverage
under the Act is limited to the overall value of the property securing
the designated loan minus the value of the land on which the property
is located.
(b) Table funded loans. An FDIC-supervised institution that
acquires a loan from a mortgage broker or other entity through table
funding shall be considered to be making a loan for the purpose of this
part.
Sec. 339.4 Exemptions.
The flood insurance requirement prescribed by Sec. 339.3 does not
apply with respect to:
(a) Any state-owned property covered under a policy of self-
insurance satisfactory to the Director of FEMA, who publishes and
periodically revises the list of states falling within this exemption;
or
(b) Property securing any loan with an original principal balance
of $5,000 or less and a repayment term of one year or less.
Sec. 339.5 Escrow requirement.
If an FDIC-supervised institution requires the escrow of taxes,
insurance premiums, fees, or any other charges for a loan secured by
residential improved real estate or a mobile home that is made,
increased, extended, or renewed on or after October 1, 1996, the FDIC-
supervised institution shall also require the escrow of all premiums
and fees for any flood insurance required under Sec. 339.3. The FDIC-
supervised institution, or a servicer acting on behalf of the FDIC-
supervised institution, shall deposit the flood insurance premiums on
behalf of the borrower in an escrow account. This escrow account will
be subject to escrow requirements adopted pursuant to section 10 of the
Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2609) (RESPA),
which generally limits the amount that may be maintained in escrow
accounts for certain types of loans and requires escrow account
statements for those accounts, only if the loan is otherwise subject to
RESPA. Following receipt of a notice from the Director of FEMA or other
provider of flood insurance that premiums are due, the FDIC-supervised
institution, or a servicer acting on behalf of the FDIC-supervised
institution, shall pay the amount owed to the insurance provider from
the escrow account by the date when such premiums are due.
Sec. 339.6 Required use of standard flood hazard determination form.
(a) Use of form. An FDIC-supervised institution shall use the
standard flood hazard determination form developed
[[Page 75745]]
by the Director of FEMA when determining whether the building or mobile
home offered as collateral security for a loan is or will be located in
a special flood hazard area in which flood insurance is available under
the Act. The standard flood hazard determination form may be used in a
printed, computerized, or electronic manner. An FDIC-supervised
institution may obtain the standard flood hazard determination form by
written request to FEMA, P.O. Box 2012, Jessup, MD 20794-2012.
(b) Retention of form. An FDIC-supervised institution shall retain
a copy of the completed standard flood hazard determination form, in
either hard copy or electronic form, for the period of time the FDIC-
supervised institution owns the loan.
Sec. 339.7 Forced placement of flood insurance.
If an FDIC-supervised institution, or a servicer acting on behalf
of the FDIC-supervised institution, determines, at any time during the
term of a designated loan, that the building or mobile home and any
personal property securing the designated loan is not covered by flood
insurance or is covered by flood insurance in an amount less than the
amount required under Sec. 339.3, then the FDIC-supervised institution
or its servicer shall notify the borrower that the borrower should
obtain flood insurance, at the borrower's expense, in an amount at
least equal to the amount required under Sec. 339.3, for the remaining
term of the loan. If the borrower fails to obtain flood insurance
within 45 days after notification, then the FDIC-supervised institution
or its servicer shall purchase insurance on the borrower's behalf. The
FDIC-supervised institution or its servicer may charge the borrower for
the cost of premiums and fees incurred in purchasing the insurance.
Sec. 339.8 Determination fees.
(a) General. Notwithstanding any federal or state law other than
the Flood Disaster Protection Act of 1973, as amended (42 U.S.C. 4001--
4129), any FDIC-supervised institution, or a servicer acting on behalf
of the FDIC-supervised institution, may charge a reasonable fee for
determining whether the building or mobile home securing the loan is
located or will be located in a special flood hazard area. A
determination fee may also include, but is not limited to, a fee for
life-of-loan monitoring.
(b) Borrower fee. The determination fee authorized by paragraph (a)
of this section may be charged to the borrower if the determination:
(1) Is made in connection with a making, increasing, extending, or
renewing of the loan that is initiated by the borrower;
(2) Reflects the Director of FEMA's revision or updating of
floodplain areas or flood-risk zones;
(3) Reflects the Director of FEMA's publication of a notice or
compendium that:
(i) Affects the area in which the building or mobile home securing
the loan is located; or
(ii) By determination of the Director of FEMA, may reasonably
require a determination whether the building or mobile home securing
the loan is located in a special flood hazard area; or
(4) Results in the purchase of flood insurance coverage by the
lender or its servicer on behalf of the borrower under Sec. 339.7.
(c) Purchaser or transferee fee. The determination fee authorized
by paragraph (a) of this section may be charged to the purchaser or
transferee of a loan in the case of the sale or transfer of the loan.
Sec. 339.9 Notice of special flood hazards and availability of
federal disaster relief assistance.
(a) Notice requirement. When an FDIC-supervised institution makes,
increases, extends, or renews a loan secured by a building or a mobile
home located or to be located in a special flood hazard area, the FDIC-
supervised institution shall mail or deliver a written notice to the
borrower and to the servicer in all cases whether or not flood
insurance is available under the Act for the collateral securing the
loan.
(b) Contents of notice. The written notice must include the
following information:
(1) A warning, in a form approved by the Director of FEMA, that the
building or the mobile home is or will be located in a special flood
hazard area;
(2) A description of the flood insurance purchase requirements set
forth in section 102(b) of the Flood Disaster Protection Act of 1973,
as amended (42 U.S.C. 4012a(b));
(3) A statement, where applicable, that flood insurance coverage is
available under the NFIP and may also be available from private
insurers; and
(4) A statement whether federal disaster relief assistance may be
available in the event of damage to the building or mobile home caused
by flooding in a federally-declared disaster.
(c) Timing of notice. The FDIC-supervised institution shall provide
the notice required by paragraph (a) of this section to the borrower
within a reasonable time before the completion of the transaction, and
to the servicer as promptly as practicable after the FDIC-supervised
institution provides notice to the borrower and in any event no later
than the time the FDIC-supervised institution provides other similar
notices to the servicer concerning hazard insurance and taxes. Notice
to the servicer may be made electronically or may take the form of a
copy of the notice to the borrower.
(d) Record of receipt. The FDIC-supervised institution shall retain
a record of the receipt of the notices by the borrower and the servicer
for the period of time the FDIC-supervised institution owns the loan.
(e) Alternate method of notice. Instead of providing the notice to
the borrower required by paragraph (a) of this section, an FDIC-
supervised institution may obtain satisfactory written assurance from a
seller or lessor that, within a reasonable time before the completion
of the sale or lease transaction, the seller or lessor has provided
such notice to the purchaser or lessee. The FDIC-supervised institution
shall retain a record of the written assurance from the seller or
lessor for the period of time the FDIC-supervised institution owns the
loan.
(f) Use of prescribed form of notice. An FDIC-supervised
institution will be considered to be in compliance with the requirement
for notice to the borrower of this section by providing written notice
to the borrower containing the language presented in appendix A to this
part within a reasonable time before the completion of the transaction.
The notice presented in appendix A to this part satisfies the borrower
notice requirements of the Act.
Sec. 339.10 Notice of servicer's identity.
(a) Notice requirement. When an FDIC-supervised institution makes,
increases, extends, renews, sells, or transfers a loan secured by a
building or mobile home located or to be located in a special flood
hazard area, the FDIC-supervised institution shall notify the Director
of FEMA (or the Director of FEMA's designee) in writing of the identity
of the servicer of the loan. The Director of FEMA has designated the
insurance provider to receive the FDIC-supervised institution's notice
of the servicer's identity. This notice may be provided electronically
if electronic transmission is satisfactory to the Director of FEMA's
designee.
(b) Transfer of servicing rights. The FDIC-supervised institution
shall notify the Director of FEMA (or the Director of FEMA's designee)
of any change in the
[[Page 75746]]
servicer of a loan described in paragraph (a) of this section within 60
days after the effective date of the change. This notice may be
provided electronically if electronic transmission is satisfactory to
the Director of FEMA's designee. Upon any change in the servicing of a
loan described in paragraph (a) of this section, the duty to provide
notice under this paragraph (b) shall transfer to the transferee
servicer.
Appendix A to Part 339--Sample Form of Notice of Special Flood Hazards
and Availability of Federal Disaster Relief Assistance
We are giving you this notice to inform you that:
The building or mobile home securing the loan for which you have
applied is or will be located in an area with special flood hazards.
The area has been identified by the Director of the Federal
Emergency Management Agency (FEMA) as a special flood hazard area
using FEMA's Flood Insurance Rate Map or the Flood Hazard Boundary
Map for the following community: ___--. This area has at least a one
percent (1%) chance of a flood equal to or exceeding the base flood
elevation (a 100-year flood) in any given year. During the life of a
30-year mortgage loan, the risk of a 100-year flood in a special
flood hazard area is 26 percent (26%).
Federal law allows a lender and borrower jointly to request the
Director of FEMA to review the determination of whether the property
securing the loan is located in a special flood hazard area. If you
would like to make such a request, please contact us for further
information. _________--The community in which the property securing
the loan is located participates in the National Flood Insurance
Program (NFIP). Federal law will not allow us to make you the loan
that you have applied for if you do not purchase flood insurance.
The flood insurance must be maintained for the life of the loan. If
you fail to purchase or renew flood insurance on the property,
federal law authorizes and requires us to purchase the flood
insurance for you at your expense.
Flood insurance coverage under the NFIP may be
purchased through an insurance agent who will obtain the policy
either directly through the NFIP or through an insurance company
that participates in the NFIP. Flood insurance also may be available
from private insurers that do not participate in the NFIP.
At a minimum, flood insurance purchased must cover the
lesser of:
(1) The outstanding principal balance of the loan; or
(2) the maximum amount of coverage allowed for the type of
property under the NFIP. Flood insurance coverage under the NFIP is
limited to the overall value of the property securing the loan minus
the value of the land on which the property is located.
Federal disaster relief assistance (usually in the form
of a low-interest loan) may be available for damages incurred in
excess of your flood insurance if your community's participation in
the NFIP is in accordance with NFIP requirements.
_________--Flood insurance coverage under the NFIP is not
available for the property securing the loan because the community
in which the property is located does not participate in the NFIP.
In addition, if the non-participating community has been identified
for at least one year as containing a special flood hazard area,
properties located in the community will not be eligible for federal
disaster relief assistance in the event of a federally-declared
flood disaster.
PART 391--FORMER OFFICE OF THRIFT SUPERVISION REGULATIONS
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2. The authority citation for Part 391 is revised to read as follows:
Authority: 12 U.S.C. 1819.
Subpart A also issued under 12 U.S.C. 1462a; 1463; 1464; 1828;
1831p-1; 1881-1884; 15 U.S.C. 1681w; 15 U.S.C. 6801; 6805.
Subpart B also issued under 12 U.S.C. 1462a; 1463; 1464; 1828;
1831p-1; 1881-1884; 15 U.S.C.1681w; 15 U.S.C. 6801; 6805.
Subpart C also issued under 12 U.S.C. 1462a; 1463; 1464; 1828;
1831p-1; and 1881-1884; 15 U.S.C. 1681m; 1681w.
Subpart E also issued under 12 U.S.C. 1467a; 1468; 1817; 1831i.
Subpart D--[Removed and Reserved]
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3. Remove and reserve Subpart D consisting of Sec. Sec. 391.30 through
391.39 and the Appendix to Subpart D.
Dated at Washington, DC, this 16th day of December 2014.
By Order of the Board of Directors, Federal Deposit Insurance
Corporation.
Robert E. Feldman,
Executive Secretary.
[FR Doc. 2014-29761 Filed 12-18-14; 8:45 am]
BILLING CODE P
