In the November 7, 2016, Federal Register (81 FR 78063, click here) the Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System (Board), the Federal Deposit Insurance Corporation (FDIC), the Farm Credit Administration (FCA), and the National Credit Union Administration (NCUA) jointly issued a proposed rule to amend 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 proposed rule would require regulated lending institutions to accept policies that meet the statutory definition of private flood insurance in the Biggert-Waters Act and permit regulated lending institutions to accept flood insurance provided by private insurers that does not meet the statutory definition of private flood insurance on a discretionary basis, subject to certain restrictions. Comments on the proposed rule must be received by the above federal agencies (collectively the Agencies) on or before January 6, 2017 by any of the methods specified on page 78063-78064 of the above-identified Federal Register. The Agencies each have issued regulations implementing the Federal flood insurance statutes that govern the National Flood Insurance Program (NFIP) for the lending institutions they supervise. The Biggert-Waters Act amended these NFIP statutory requirements. Among other things, the Biggert-Waters Act required the Agencies to issue a rule to direct regulated lending institutions to accept private flood insurance, as defined by the Biggert-Waters Act, and to notify borrowers of the availability of private flood insurance.
