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<br />COMPTROLLER OF THE CURRENCY <br /> <br />For internal control purposes a bank should retain copies of the <br /> <br /> <br />notices provided to the borrower, the borrowers written <br /> <br /> <br />acknowledgment of having received the notice, and copies of any <br /> <br /> <br />flood insurance policies. Although not required, the loan officer <br /> <br /> <br />should also indicate in the loan file that a flood determination was <br /> <br /> <br />performed. Finally, periodic reviews should be performed to ensure <br /> <br /> <br />the accuracy of compliance efforts. The institution should document <br /> <br /> <br />these reviews and include the findings in a report to senior <br /> <br /> <br />management and the board or its designated compliance committee. <br /> <br />Flood insurance is available in some 18,000 participating <br /> <br /> <br />communities. However, FEMA indicates that only 14% of the buildings <br /> <br /> <br />located in SFHAS have been insured. Therefore, banks should also <br /> <br /> <br />assess the financial risk associated with properties held as other <br /> <br /> <br />real estate owned and located both in SFHA and in participating <br /> <br /> <br />communities. For those properties located in flood prone areas, <br /> <br /> <br />mangement should consider purchasing flood insurance. <br /> <br />Compliance with the Flood Disaster Protection Act is an integral <br /> <br /> <br />part of a financial institution's sound compliance program. Banks <br /> <br /> <br />need to ensure accurate and adequate flood determination records are <br /> <br /> <br />maintained. This will promote and support compliance with flood <br /> <br /> <br />protection legislation. These issues should be discussed with both <br /> <br /> <br />the board and management of all financial institutions. If needed, <br /> <br /> <br />adequate procedures should be implemented to ensure compliance. <br /> <br />,17, <br />