JOINT AGENCY ACTIONS: Joint Agencies Release Guidance on Flood Disaster Protection Act
The joint agencies issued interagency guidance to inform financial institutions about revisions to the Flood Disaster Protection Act of 1973, which was amended by the Biggert-Waters Flood Insurance Reform Act of 2012. The Flood Insurance Guidance provides clarity on the parts of the act that are currently in effect including:
Amendments to the force placement provisions of the FDPA.
- The increase of the maximum civil money penalty for an FDPA violation to $2,000 and the elimination of the annual penalty cap.
- The joint agencies will release additional regulations addressing flood insurance issues including:
- The requirement that lenders accept private flood insurance policies if the coverage satisfies the standards specified in the act.
- The requirement that lenders disclose to borrowers certain information regarding the National Flood Insurance Program.
- The requirement that certain lenders and servicers establish escrow accounts for flood insurance premiums and fees for any loan outstanding or entered into after July 6, 2014, that is secured by residential improved real estate or a mobile home. This provision includes an exemption for certain institutions with less than $1 billion in assets.