Recordkeeping and Disclosure Requirements Associated with Loans Secured by Real Estate Located in Flood Hazard Areas Pursuant to Section 208.25 of Regulation H
ICR 201906-7100-004 · OMB 7100-0280 · Active
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Recordkeeping and Disclosure Requirements Associated with Loans Secured by Real Estate Located in Flood Hazard Areas Pursuant to Section 208.25 of Regulation H
In general, the federal flood insurance statutes and Regulation H - Membership of State Banking Institutions in the Federal Reserve System (12 CFR 208) provide that a lender shall not make, increase, extend, or renew a loan secured by a building or mobile home located in a special flood hazard area unless the secured property is covered by flood insurance for the term of the loan. With respect to the recordkeeping and disclosure provisions, the regulation requires state member banks to:
⢠retain a completed copy of the Standard Flood Hazard Determination Form developed by the Federal Emergency Management Agency (standard FEMA form). The form is used by lenders to document their determination of whether improved property securing a loan is in a special flood hazard area,
⢠notify a borrower and servicer when loans secured by improved property are determined to be in a special flood hazard area and retain a record of receipt of the notice,
⢠notify a borrower of a loan secured by residential improved property or a mobile home that the state member bank is required to escrow all premiums and fees for required flood insurance when the bank makes, increases, extends, or renews the loan. For loans secured by residential improved property or a mobile home that were outstanding on January 1, 2016, or July 1 of the first year in which the bank loses its exception from the escrow requirement, the state member bank must mail or deliver information on the option to escrow flood premiums and fees,
⢠notify a borrower of the borrowerâs obligation to obtain flood insurance if the lender determines at any time during the term of the loan that the improved property securing the loan is not covered by adequate flood insurance. If the borrower fails to obtain the flood insurance within 45 days of this notification, the state member bank or its servicer must purchase insurance and may charge the borrower for the cost of the premiums. If the state member bank receives confirmation of a borrowerâs existing flood insurance coverage after it has force placed insurance on behalf of the borrower, the bank or its servicer shall notify the insurance provider to terminate any insurance purchased by the bank or its servicer, and
⢠notify the Federal Emergency Management Agency (FEMA) of the identity of, and any change in, the servicer of a loan secured by improved property in a special flood hazard area.
The information collection requirements under the flood hazard provisions of Regulation H are triggered by specific events in the lending process.
US Code:
42 USC 4012a
Name of Law: Flood Disaster Protection Act of 1973
US Code:
42 USC 4104a
Name of Law: National Flood Insurance Act of 1968
US Code:
12 USC 321
Name of Law: Federal Reserve Act
US Code:
12 USC 248(i)
Name of Law: Federal Reserve Act
PL: Pub.L. 112 - 141 126 Name of Law: Biggert-Waters Flood Insurance Reform Act of 2012
The Office of the Comptroller of the Currency (OCC), the Board, the Federal Deposit Insurance Corporation (FDIC), the Farm Credit Administration (FCA), and the National Credit Union Administration (NCUA) (collectively, the agencies) have amended their regulations regarding loans in areas having special flood hazards to implement the private flood insurance provisions of the Biggert-Waters Flood Insurance Reform Act of 2012 (Biggert-Waters Act). Specifically, the final rule requires regulated lending institutions to accept policies that meet the statutory definition of âprivate flood insuranceâ in the Biggert-Waters Act and permits regulated lending institutions to exercise their discretion to accept flood insurance policies issued by private insurers and plans providing flood coverage issued by mutual aid societies that do not meet the statutory definition of âprivate flood insurance,â subject to certain restrictions. The FR H 2 has been revised to add new recordkeeping requirements for the private flood insurance. The final rule is effective on July 1, 2019.
On behalf of this Federal agency, I certify that the collection of information encompassed by this request complies with 5 CFR 1320.9 and the related provisions of 5 CFR 1320.8(b)(3).
The following is a summary of the topics, regarding the proposed collection of information, that the certification covers:
(i) Why the information is being collected;
(ii) Use of information;
(iii) Burden estimate;
(iv) Nature of response (voluntary, required for a benefit, or mandatory);
(v) Nature and extent of confidentiality; and
(vi) Need to display currently valid OMB control number;
If you are unable to certify compliance with any of these provisions, identify the item by leaving the box unchecked and explain the reason in the Supporting Statement.
FRH2_20190618_omb.pdf
Recordkeeping Sections 208.25(c)(3)(iii) and (iv) Private flood insurance