[Congressional Record Volume 158, Number 172 (Tuesday, January 1, 2013)]
[House]
[Pages H7528-H7529]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




            FLOOD DISASTER PROTECTION ACT OF 1973 CORRECTION

  Mrs. BIGGERT. Mr. Speaker, I ask unanimous consent that the Committee 
on Financial Services be discharged from further consideration of the 
bill (S. 3677) to make a technical correction to the Flood Disaster 
Protection Act of 1973, and ask for its immediate consideration in the 
House.
  The Clerk read the title of the bill.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentlewoman from Illinois?
  There was no objection.
  The text of the bill is as follows:

                                S. 3677

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. TECHNICAL CORRECTION.

       Section 102(d)(1)(A) of the Flood Disaster Protection Act 
     of 1973 (42 U.S.C. 4012a(d)(1)(A)) is amended by inserting 
     ``residential'' before ``improved real estate'' each place 
     that term appears.

  Mrs. BIGGERT. I rise today to ask my colleagues for their support of 
S. 3677, a bill to make a technical correction to the Flood Disaster 
Protection Act of 1973.
  S. 3677 is designed to clarify language within a provision of the 
Biggert-Waters Flood Insurance Reform Act that requires escrowing of 
flood insurance payments by federally regulated lending institutions. 
The provision in current law could be interpreted as requiring 
escrowing of flood insurance payments for residential, commercial, and 
multifamily loans. This is an incorrect interpretation. That's why S. 
3677 is necessary to clarify that this escrowing provision only applies 
to ``residential'' mortgage loans and not commercial and multifamily 
loans.
  Earlier this year, Congress enacted legislation to make needed 
reforms to the National Flood Insurance Program. These reforms will 
begin the process of putting the program back on sound financial 
footing, thus reducing taxpayer exposure while ensuring coverage is 
available for at-risk Americans.
  The Biggert-Waters Act requires escrowing by lenders with over $1 
billion in assets for ``any loan secured by the improved real estate or 
mobile home.'' The language ``any loan'' could broadly be interpreted 
as requiring

[[Page H7529]]

escrowing for commercial properties, and escrowing is traditionally 
only for residential properties.
  S. 3677 would insert the word ``residential'' before ``improved real 
estate'' to remove the ambiguity. Adding ``residential'' to ``improved 
real estate'' makes clear the application of this provision to loans 
secured by residences designed for the occupancy of one to four 
families and does not impose new escrow obligations on commercial and 
multifamily real estate servicers.
  It recognizes the loan servicing practices of commercial and 
multifamily real estate borrowers as distinct from those of residential 
borrowers, thus exempting these loans. It also ensures consistency with 
other financial institution regulations.
  This bill is supported by the American Bankers Association, including 
its members of the American Bankers Insurance Association, or ABIA. I 
would like to insert their letter of support for the Record.
  Without this bill, the ABIA states that ``banks will face expensive 
compliance and training costs to implement this unintended provision.'' 
That cost inevitably will be passed on to businesses with commercial 
loans. S. 3677 will correct this unintended consequence, and I urge my 
colleagues to support this technical corrections bill.
  The bill was ordered to be read a third time, was read the third 
time, and passed, and a motion to reconsider was laid on the table.

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