[Federal Register Volume 60, Number 129 (Thursday, July 6, 1995)]
[Rules and Regulations]
[Pages 35286-35289]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-16199]
[[Page 35285]]
_______________________________________________________________________
Part V
Department of the Treasury
Office of the Comptroller of the Currency
12 CFR Part 22
Federal Reserve System
12 CFR Part 208
Federal Deposit Insurance Corporation
12 CFR Part 339
Department of the Treasury
Office of Thrift Supervision
12 CFR Part 563
Farm Credit Administration
12 CFR Part 614
National Credit Union Administration
12 CFR Part 760
_______________________________________________________________________
Loans in Areas Having Special Flood Hazards; Final Rule
Federal Register / Vol. 60, No. 129 / Thursday, July 6, 1995 / Rules
and Regulations
[[Page 35286]]
DEPARTMENT OF THE TREASURY
Office of the Comptroller of the Currency
12 CFR Part 22
[Docket No. 95-12]
RIN 1557-AB47
FEDERAL RESERVE SYSTEM
12 CFR Part 208
[Regulation H, Docket No. R-0882]
FEDERAL DEPOSIT INSURANCE CORPORATION
12 CFR Part 339
RIN 3064-AB62
DEPARTMENT OF THE TREASURY
Office of Thrift Supervision
12 CFR Part 563
[No. 95-124]
RIN 1550-AA82
FARM CREDIT ADMINISTRATION
12 CFR Part 614
RIN 3052-AB57
NATIONAL CREDIT UNION ADMINISTRATION
12 CFR Part 760
Loans in Areas Having Special Flood Hazards
AGENCIES: Office of the Comptroller of the Currency, Treasury (OCC);
Board of Governors of the Federal Reserve System (Board); Federal
Deposit Insurance Corporation (FDIC); Office of Thrift Supervision,
Treasury (OTS); Farm Credit Administration (FCA); and National Credit
Union Administration (NCUA) (collectively, the Federal entities for
lending regulation or the agencies).
ACTION: Joint final rule.
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SUMMARY: The OCC, Board, FDIC, OTS, and NCUA are amending their
regulations concerning loans in areas having special flood hazards to
require depository institutions to use the Standard Flood Hazard
Determination Form (the standard form) in determining whether real
property offered as collateral for a loan is located in a special flood
hazard area. The FCA is adopting this same requirement in new
regulations. The standard form has been developed by the Federal
Emergency Management Agency (the FEMA), in consultation with the
Federal entities for lending regulation and other agencies. Use of the
standard form will help ensure that borrowers obtain the required flood
insurance for improved real property and mobile homes located in
special flood hazard areas.
EFFECTIVE DATE: January 2, 1996.
FOR FURTHER INFORMATION CONTACT: OCC: Carol Workman, Compliance
Specialist, Compliance Management (202) 874-4858, Margaret Hesse,
Attorney, Community and Consumer Law Division, (202) 874-5750, or
Jacqueline L. Lussier, Senior Attorney, Legislative and Regulatory
Activities Division, Office of Chief Counsel, (202) 874-5090, Office of
the Comptroller of the Currency, 250 E Street, SW, Washington, D.C.
20219.
BOARD: Diane Jackins, Senior Review Examiner, or Jennifer Lowe,
Review Examiner, Division of Consumer and Community Affairs, (202) 452-
3946, or Lawranne Stewart, Senior Attorney, (202) 452-3513, or Rick
Heyke, Attorney, (202) 452-3688, Legal Division, Board of Governors of
the Federal Reserve System, 20th Street and Constitution Avenue, NW,
Washington, D.C. 20551.
FDIC: Mark Mellon, Senior Attorney, Regulation and Legislation
Section, Legal Division, (202) 898-3854, or Ken Baebel, Senior Review
Examiner, (202) 942-3086, or Barbara L. Boehm, Consumer Affairs
Specialist, (202) 942-3631, Division of Compliance and Consumer
Affairs, Federal Deposit Insurance Corporation, 550 17th Street, NW.,
Washington, D.C. 20429.
OTS: Larry Clark, Program Manager, Compliance Policy, (202) 906-
5628, or Catherine Shepard, Senior Attorney, Regulation and Legislation
Division, Office of the Chief Counsel, (202) 906-7275, Office of Thrift
Supervision, 1700 G Street, NW, Washington, D.C. 20552.
FCA: Robert G. Magnuson, Policy Analyst, Regulation Development,
Office of Examination, (703) 883-4498, or William L. Larsen, Senior
Attorney, Office of General Counsel, (703) 883-4020, Farm Credit
Administration, 1501 Farm Credit Drive, McLean, VA 22102-5090.
NCUA: Kimberly Iverson, Program Officer, (703) 518-6375, or Jeffrey
S. Mooney, Staff Attorney, (703) 518-6563, 1775 Duke Street,
Alexandria, VA 22314-3428.
SUPPLEMENTARY INFORMATION:
I. Background
Federal Flood Insurance Legislation
Congress enacted the National Flood Insurance Act of 1968 (the 68
Act) (Pub. L. 90-448, 82 Stat. 476) and the Flood Disaster Protection
Act of 1973 (the 73 Act) (Pub. L. 93-234, 87 Stat. 975) to provide,
through the authorization of a Federal flood insurance program, an
opportunity for property owners to purchase protection for property
subject to flooding. The 68 Act and the 73 Act are codified at 42
U.S.C. 4001 et seq.
The Reform Act
Amendments to the 68 Act and the 73 Act are set forth in the
National Flood Insurance Reform Act of 1994 (the Reform Act), Title V
of the Riegle Community Development and Regulatory Improvement Act of
1994 (Pub. L. 103-325, 108 Stat. 2160). Several of these amendments
require implementing regulations by the Federal entities for lending
regulation.\1\
\1\ One change effected by the Reform Act is to make Farm Credit
System institutions subject for the first time to the requirements
of the 68 Act and the 73 Act. See sections 1370(a)(13) of the 68 Act
(42 U.S.C. 4121(a)); and 3(a)(10) of the 73 Act (42 U.S.C.
4003(a)(10)). As a result, the FCA, the Federal entity responsible
for the supervision of such institutions, must promulgate
regulations to implement the requirements of these statutes. This
final rule is part of that project.
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As amended by the Reform Act, the 73 Act directs the Federal
entities for lending regulation (a term defined by section 3(a)(5) of
the 73 Act (42 U.S.C. 4003(a)(5)) to include the OCC, Board, FDIC, OTS,
FCA, and the NCUA) to issue regulations which direct regulated lending
institutions (a term defined by section 3(a)(10) of the 73 Act (42
U.S.C. 4003(a)(10)) to include any bank, savings and loan association,
Farm Credit System institution, and credit union) which are subject to
their supervision to ensure that any loan secured by improved real
estate or a mobile home (real property) located or to be located in a
special flood hazard area is covered for the term of the loan by flood
insurance. Section 102(b) of the 73 Act (42 U.S.C. 4012a(b)).
Standard Flood Hazard Determination Form
Section 528 of the Reform Act amends the 68 Act by adding a new
section 1365 (42 U.S.C. 4104b). Section 1365(a) of the 68 Act requires
the Director of the FEMA, in consultation with the Federal entities for
lending regulation (among others), to develop a Standard Flood Hazard
Determination Form for use in determining whether real property offered
as collateral on a loan is located in a special flood hazard area.
Section 1365(a) states that the standard form shall be established by
FEMA regulations issued not later than 270 days after the date of
enactment of the Reform Act. The Reform Act was signed
[[Page 35287]]
into law on September 23, 1994. The standard form must therefore be
established by the FEMA by no later than June 20, 1995.
A proposed rulemaking to establish the standard form was approved
for release for notice and comment by the FEMA on March 30, 1995. See
60 FR 17758 (April 7, 1995). The public comment period on the proposed
rule ended on May 8, 1995. The proposed rule was adopted by the FEMA in
final form on June 20, 1995, and is published elsewhere in today's
Federal Register.
Section 1365(c) of the 68 Act states that the Federal entities for
lending regulation must promulgate regulations which require the use of
the standard form by regulated lending institutions when determining
whether real property offered as collateral for a loan is located in a
special flood hazard area. Section 1365(c) further states that a lender
or other person may comply with this requirement by using the standard
form in a printed, computerized, or electronic manner.
Section 1365(f) of the 68 Act states that the regulations requiring
use of the standard form must be issued together with the FEMA
regulation which establishes the standard form and that the form will
have an effective date of 180 days after the date of issuance of the
regulations. To satisfy this requirement, this final rule requiring the
use of the standard form is published in the same issue of the Federal
Register as the final rule of the FEMA which establishes the standard
form.
II. The Final Rule
Notice and comment on the final rule requiring the use of the
standard form are unnecessary since the rulemaking merely implements
the statutory requirement that the standard form be used by regulated
lending institutions. The rulemaking is therefore technical in nature.
The required use of the standard form is not in need of definition or
interpretation. Moreover, the public has already had the opportunity to
comment on the substantive content and format of the standard form,
thus fulfilling the public interest in notice and comment. The final
format and content of the standard form have been determined through
the related FEMA rulemaking described above.
The Federal entities for lending regulation therefore find good
cause, in accordance with section 553(b)(B) of the Administrative
Procedure Act (5 U.S.C. 553(b)(B)), to omit notice and comment on the
rules as unnecessary and to instead issue final rules which impose the
requirement that the standard form be used by regulated lending
institutions.
III. Effective Date
The final rule will become effective January 2, 1996.
IV. Paperwork Reduction Act
As noted previously, it is the responsibility of the FEMA to
establish the standard form by regulation. The FEMA has determined that
the standard form constitutes a ``collection of information'' as that
term is defined in section 3502(4) of the Paperwork Reduction Act (the
PRA) (44 U.S.C. 3501 et seq.). See 60 FR 17760. The FEMA has submitted
information on the standard form to the Office of Management and Budget
for review as required by section 3507 of the PRA (44 U.S.C. 3507). The
Director of OMB has approved the proposed information collection
request of the FEMA, as required by section 3507.
V. Regulatory Burden
Section 302 of the Riegle Community Development and Regulatory
Improvement Act (12 U.S.C. 4802) provides that each Federal banking
agency must consider the administrative burdens and benefits of any new
regulations that impose additional requirements on insured depository
institutions. Section 302 also requires that any regulations which
impose additional reporting, disclosure, or other requirements on
insured depository institutions shall take effect on the first day of a
calendar quarter which begins on or after the date on which the
regulations are published in final form. This requirement need not be
observed, however, if a Federal statute requires that the regulation
take effect on a different date from the one mandated by section 302.
See section 302(b)(1)(C) (12 U.S.C. 4802(b)(1)(C)).
Requiring the use of the standard form will be an additional
requirement for depository institutions. Section 528 of the Reform Act
provides, however, that the standard form be used and the agencies must
implement this statutory requirement.
Moreover, as noted previously, the new section 1365(f) of the 68
Act, as added by section 528 of the Reform Act, provides that the
regulations requiring the use of the standard form shall be effective
upon the expiration of the 180-day period beginning on the date of the
regulations' issuance. Since the 68 Act requires that the regulations
requiring the use of the standard form take effect on a different date
from the one mandated by section 302, the exception in section 302 is
operative.
VI. Executive Order 12866
The OCC and the OTS have determined that this rule is not a
significant regulatory action as defined in Executive Order 12866.
VII. Unfunded Mandates Act of 1995
The OCC and the OTS have determined that the requirements of this
final rule will not result in expenditures by State, local, and tribal
governments, or by the private sector, of more than $100 million in any
one year. Accordingly, a budgetary impact statement is not required
under section 202 of the Unfunded Mandates Act of 1995.
VIII. NCUA Executive Order 12612 Statement
This rule, like the current part 760 it is replacing, will apply to
all Federally insured credit unions. The NCUA Board, pursuant to
Executive Order 12612, has determined, however, that this rule will not
have a substantial direct effect on the states, on the relationship
between the national government and the states, or on the distribution
of power and responsibilities among various levels of government.
Further, this rule will not preempt provisions of state law or
regulations.
List of Subjects
12 CFR Part 22
Flood insurance, Mortgages, National banks, Reporting and
recordkeeping requirements.
12 CFR Part 208
Accounting, Agriculture, Banks, banking, Confidential business
information, Crime, Currency, Federal Reserve System, Flood insurance,
Mortgages, Reporting and recordkeeping requirements.
12 CFR Part 339
Flood insurance, Reporting and recordkeeping requirements.
12 CFR Part 563
Accounting, Advertising, Crime, Currency, Flood insurance,
Investments, Reporting and recordkeeping requirements, Savings
associations, Securities, Surety bonds.
12 CFR Part 614
Agriculture, Banks, banking, Flood insurance, Foreign trade,
Reporting and recordkeeping requirements, Rural areas.
[[Page 35288]]
12 CFR Part 760
Credit unions, Mortgages, Flood insurance, Reporting and
recordkeeping requirements.
Office of the Comptroller of the Currency
12 CFR CHAPTER I
Authority and Issuance
For the reasons set forth in the joint preamble, part 22 of chapter
I of title 12 of the Code of Federal Regulations is amended as set
forth below:
PART 22--LOANS IN AREAS HAVING SPECIAL FLOOD HAZARDS
1. The authority citation for part 22 is revised to read as
follows:
Authority: 42 U.S.C. 4012a, 4104a, 4104b, 4106, and 4128.
2. A new Sec. 22.6 is added to read as follows:
Sec. 22.6 Required use of Standard Flood Hazard Determination Form.
A bank shall use the standard flood hazard determination form
developed by the Director of the Federal Emergency Management Agency
(the FEMA) (as set forth in appendix A of 44 CFR part 65) when
determining whether improved real estate or a mobile home offered as
collateral security for a loan is located in an area identified by the
Director of the FEMA as having special flood hazards and in which flood
insurance has been made available under the National Flood Insurance
Act of 1968 (12 U.S.C. 4001 et seq.). The standard flood hazard
determination form may be used in a printed, computerized, or
electronic manner.
Dated: June 20, 1995.
Eugene A. Ludwig,
Comptroller of the Currency.
FEDERAL RESERVE SYSTEM
12 CFR CHAPTER II
For the reasons set forth in the joint preamble, the Board amends
12 CFR Part 208 as set forth below:
PART 208--MEMBERSHIP OF STATE BANKING INSTITUTIONS IN THE FEDERAL
RESERVE SYSTEM (REGULATION H)
1. The authority citation for part 208 is revised to read as
follows:
Authority: 12 U.S.C. 36, 248(a), 248(c), 321-338a, 371d, 461,
481-486, 601, 611, 1814, 1823(j), 1828(o), 1831o, 1831p-1, 3105,
3310, 3331-3351, and 3906-3909; 15 U.S.C. 78b, 781(b), 781(g),
781(j), 78o-4(c)(5), 78q, 78q-1, and 78w; 31 U.S.C. 5318; 42 U.S.C.
4012a, 4104a, 4104b, 4106, and 4128.
2. Section 208.8 is amended by adding a new paragraph (e)(4) to
read as follows:
Sec. 208.8 Banking practices.
* * * * *
(e) * * *
(4) Required use of Standard Flood Hazard Determination Form. A
state member bank shall use the standard flood hazard determination
form developed by the Director of the Federal Emergency Management
Agency (the FEMA) (as set forth in Appendix A of 44 CFR Part 65) when
determining whether improved real estate or a mobile home offered as
collateral security for a loan is located in an area identified by the
Director of the FEMA as having special flood hazards and in which flood
insurance has been made available under the National Flood Insurance
Act of 1968. The standard flood hazard determination form may be used
in a printed, computerized, or electronic manner.
* * * * *
By order of the Board of Governors of the Federal Reserve
System, June 20, 1995.
William W. Wiles,
Secretary of the Board.
Federal Deposit Insurance Corporation
12 CFR CHAPTER III
Authority and Issuance
For the reasons set forth in the joint preamble, the Board of
Directors of the FDIC amends Part 339 of Chapter III of title 12 of the
Code of Federal Regulations as follows:
PART 339--LOANS IN AREAS HAVING SPECIAL FLOOD HAZARDS
1. The authority citation for part 339 is revised to read as
follows:
Authority: 42 U.S.C. 4012a, 4104a, 4104b, 4106, and 4128.
2. Section 339.7 is added to read as follows:
Sec. 339.7 Required use of Standard Flood Hazard Determination Form.
A bank shall use the standard flood hazard determination form
developed by the Director of the Federal Emergency Management Agency
(the FEMA) (as set forth in Appendix A of 44 CFR Part 65) when
determining whether improved real estate or a mobile home offered as
collateral security for a loan (as that term is defined in
Sec. 339.2(b)) is located in an area identified by the Director of the
FEMA as having special flood hazards and in which flood insurance has
been made available under the National Flood Insurance Act of 1968. The
standard flood hazard determination form may be used in a printed,
computerized, or electronic manner.
By order of the Board of Directors.
Dated at Washington, D.C., this 19th day of June, 1995.
Federal Deposit Insurance Corporation.
Jerry L. Langley,
Executive Secretary.
Office of Thrift Supervision
12 CFR CHAPTER V
Authority and Issuance
Accordingly, for the reasons set forth in the joint preamble, the
Office of Thrift Supervision hereby amends chapter V, title 12 of the
Code of Federal Regulations, as set forth below:
SUBCHAPTER D--REGULATIONS APPLICABLE TO ALL SAVINGS ASSOCIATIONS
PART 563--OPERATIONS
1. The authority citation for part 563 is revised to read as
follows:
Authority: 12 U.S.C. 375b, 1462, 1462a, 1463, 1464, 1467a, 1468,
1817, 1828, 3806; 42 U.S.C. 4012a, 4104a, 4104b, 4106, 4128.
2. Section 563.48 is amended by adding a new paragraph (f) to read
as follows:
Sec. 563.48 Flood disaster protection.
* * * * *
(f) Required use of Standard Flood Hazard Determination Form. A
savings association shall use the standard flood hazard determination
form developed by the Director of the Federal Emergency Management
Agency (the FEMA) (as set forth in Appendix A of 44 CFR Part 65) when
determining whether improved real estate or a mobile home offered as
collateral security for a loan is located in an area identified by the
Director of the FEMA as having special flood hazards and in which flood
insurance has been made available under the National Flood Insurance
Act of 1968. The standard flood hazard determination form may be used
in a printed, computerized, or electronic manner.
Dated: June 16, 1995.
By the Office of Thrift Supervision.
John F. Downey,
Director, Supervision.
Farm Credit Administration
12 CFR Chapter VI
Authority and Issuance
For the reasons stated in the joint preamble, part 614 of chapter
VI, title 12 of the Code of Federal Regulations is amended as follows:
[[Page 35289]]
PART 614--LOAN POLICIES AND OPERATIONS
1. The authority citation for part 614 is revised to read as
follows:
Authority: 42 U.S.C. 4012a, 4104a, 4104b, 4106, and 4128; 1.3,
1.5, 1.6, 1.7, 1.9, 1.10, 2.0, 2.2, 2.3, 2.4, 2.10, 2.12, 2.13,
2.15, 3.0, 3.1, 3.3, 3.7, 3.8, 3.10, 3.20, 3.28, 4.12, 4.12A, 4.13,
4.13B, 4.14, 4.14A, 4.14C, 4.14D, 4.14E, 4.18, 4.19, 4.36, 4.37,
5.9, 5.10, 5.17, 7.0, 7.2, 7.6, 7.7, 7.8, 7.12, 7.13, 8.0, 8.5 of
the Farm Credit Act (12 U.S.C. 2011, 2013, 2014, 2015, 2017, 2018,
2071, 2073, 2074, 2075, 2091, 2093, 2094, 2096, 2121, 2122, 2124,
2128, 2129, 2131, 2141, 2149, 2183, 2184, 2199, 2201, 2202, 2202a,
2202c, 2202d, 2202e, 2206, 2207, 2219a, 2219b, 2243, 2244, 2252,
2279a, 2279a-2, 2279b, 2279b-1, 2279b-2, 2279f, 2279f-1, 2279aa,
2279aa-5); sec. 413 of Pub. L. 100-233, 101 Stat. 1568, 1639.
2. Part 614 is amended by adding a new subpart S to read as
follows:
Subpart S--Flood Insurance Requirements
Sec.
614.4940 Required use of Standard Flood Hazard Determination Form
Subpart S--Flood Insurance Requirements
Sec. 614.4940 Required use of Standard Flood Hazard Determination
Form.
An institution of the Farm Credit System shall use the standard
flood hazard determination form developed by the Director of the
Federal Emergency Management Agency (the FEMA) (as set forth in
Appendix A of 44 CFR part 65) when determining whether improved real
estate or a mobile home offered as collateral security for a loan is
located in an area identified by the Director of the FEMA as having
special flood hazards and in which flood insurance has been made
available under the National Flood Insurance Act of 1968. The standard
flood hazard determination form may be used in a printed, computerized,
or electronic manner.
Dated: June 16, 1995.
Floyd Fithian,
Secretary, Farm Credit Administration Board.
NATIONAL CREDIT UNION ADMINISTRATION
12 CFR Chapter VII
Authority and Issuance
For the reasons set forth in the joint preamble, the NCUA amends 12
CFR Part 760 as follows:
PART 760--FLOOD INSURANCE
1. The authority citation for part 760 is revised to read as
follows:
Authority: 12 U.S.C. 1757, 1789; 42 U.S.C. 4012a, 4104a, 4104b,
4106, and 4128.
2. Section 760.12 is added to read as follows:
Sec. 760.12 Required use of Standard Flood Hazard Determination Form
A credit union shall use the standard flood hazard determination
form developed by the Director of the Federal Emergency Management
Agency (the FEMA) (as set forth in Appendix A of 44 CFR Part 65) when
determining whether improved real estate or a mobile home offered as
collateral security for a loan is located in an area identified by the
Director of the FEMA as having special flood hazards and in which flood
insurance has been made available under the National Flood Insurance
Act of 1968. The standard flood hazard determination form may be used
in a printed, computerized, or electronic manner.
By the National Credit Union Administration Board on June 26,
1995.
Becky Baker,
Secretary of the Board.
[FR Doc. 95-16199 Filed 7-5-95; 8:45 am]
BILLING CODES 4810-33-P; 6210-01-P; 6714-01-P; 6720-01-P; 6705-01-P;
7535-01-P