FLOOD08456

• County: Statewide
• Basin: Statewide
• Title: Federal Regulations and Instructions on Flood Insurance Compliance for Lenders and Servicers
• Date: 3/1/1991
• Prepared For: NFIP
• Prepared By: FEMA
• Floodplain - Doc Type: Historic FEMA Regulatory Floodplain Information

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EXCERPTS FROM THE COMPTROLLER'S MANUAL FOR COMPLIANCE,
COMPTROLLER OF THE CURRENCY

Consumer Activities

Other Consumer -- Tier I

Flood Disaster Protection Act (Section 206 -- Consumer Handhook)

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7. Determine whether any of the communities in the institution's trade
area have designated flood areas, and whether any of the communities
are participating in the National Flood Insurance Program.

8. Review the institution's written and informal policies and internal
controls concerning flood insurance, particularly the method used by
the institution to make the flood hazard determination (including the
method used to ensure flood insurance policy renewal during the life
of the loan). As appropriate, interview bank personnel to determine
whether these policies are implemented in the prescribed manner.

9. Obtain and review copies of:

a. All records and other information (i.e., flood maps and appraisal
forms) used to determine whether improved real estate or mobile
homes are located in flood hazard areas. To determine whether a
community has been identified as flood prone and eligible for
participation in the NFIP or to obtain the date of the current
flood map, call the regional FEMA office. (See Appendix 505.206.2
in the Consumer Handbook for a list of FEMA regional offices and
phone numbers.) Check the records to determine whether they are
up-to-date. If the institution uses flood maps, verify that the
institution has a flood map for each community in the trade area.

b. Written notices (forms) that inform borrowers that the property
securing a loan is in a flood hazard area and whether or not
federal disaster relief assistance will be available if the
property is damaged by flooding (refer to sample notices in
section 206.5 of Consumer HandboOk).

c. Written acknowledgements from borrowers, indicating their
understanding that the property securing the loan is or will be
located in a flood hazard area and that they have received the
notice regarding the availability of federal disaster relief
assistance.

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10. Review an adequate sample of loan files to ascertain that the
institution's stated method of determining whether loans secured by
improved real estate or mobile homes are located in flood hazard areas
is followed. (12 CFR 22.5)

11. Complete the Flood Disaster Protection Act worksheet (be sure to pull
files which include loans in flood prone areas) to assess the bank's
level of compliance with the requirements of 12 CFR 22.

NOTE: For equity lines of credit, coverage is normally required in
the amount of the line of credit unless the bank has a system to
purchase flood insurance on disbursements.

Interest on Deposits (Section 208 -- Consumer Handbook)

12. Determine whether there is an internal check or audit to ensure
accurate interest on deposits and prepayment penalties and if so,
whether:

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