OCC Bulletin 2013-10| March 29, 2013

Flood Disaster Protection Act: Interagency Statement on Effective Dates of Certain Provisions of the Biggert–Waters Act and Impact on Proposed Interagency Questions and Answers


Chief Executive Officers of All National Banks and Federal Savings Associations, Department and Division Heads, All Examining Personnel, and Other Interested Parties

The Biggert–Waters Flood Insurance Reform Act of 2012 (the act), enacted July 6, 2012, amended various provisions of the Flood Disaster Protection Act of 1973 (FDPA). The OCC, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the Farm Credit Administration (collectively, the agencies) developed the attached statement to inform financial institutions about the effective dates of these provisions and the impact of the act on the agencies’ proposed “Interagency Questions and Answers Regarding Flood Insurance.”

The Biggert Waters Act amended the force placement provision and the civil money penalty provision in the FDPA. In addition, as revised, the act amended the mandatory purchase requirement in the FDPA to require lenders to accept private flood insurance policies in satisfaction of the mandatory purchase requirement if the coverage provided by the private flood insurance satisfies the standards specified in the act.

The act also requires lenders and servicers to establish escrow accounts for flood insurance premiums and fees for any residential mortgage outstanding or entered into on or after July 6, 2014, unless (1) the institution has less than $1 billion in assets, and (2) as of July 6, 2012, the institution was not required by federal or state law to escrow taxes or insurance premiums for the term of the loan, and the institution did not have a policy of requiring escrow of taxes and insurance premiums.

The attached statement informs financial institutions that it is the agencies’ position that the force placement and civil money penalty provisions became effective upon enactment; however, the private flood insurance and escrow provisions will not be effective until regulations are issued. In addition, the statement discusses the impact of the act on the “Interagency Questions and Answers Regarding Flood Insurance” that were proposed on October 17, 2011 (76 FR 64175).

Please direct questions regarding this bulletin to the Compliance Policy Department at (202) 649-5470.


Grovetta N. Gardineer
Deputy Comptroller for Compliance Policy

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