[Federal Register Volume 76, Number 153 (Tuesday, August 9, 2011)]
[Notices]
[Pages 48943-48946]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-19785]


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DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency


Agency Information Collection Activities: Submission for OMB 
Review; Comment Request

AGENCY: Office of the Comptroller of the Currency (OCC), Treasury.

ACTION: Notice and request for comment.

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SUMMARY: The OCC, as part of its continuing effort to reduce paperwork 
and respondent burden, invites the general public and other Federal 
agencies to comment on a continuing information collection, as required 
by the Paperwork Reduction Act of 1995. An agency may not conduct or 
sponsor, and a respondent is not required to respond to, an information 
collection unless it displays a currently valid Office of Management 
and Budget (OMB) control number. The OCC is soliciting comment 
concerning its information collection titled ``Loans in Areas Having 
Special Flood Hazards.'' The OCC is also giving notice that it has 
submitted the collection to OMB for review.

DATES: You should submit written comments by: September 8, 2011.

ADDRESSES: Communications Division, Office of the Comptroller of the 
Currency, Mail Stop 2-3, Attention: 1557-0202, 250 E Street, SW., 
Washington, DC 20219. In addition, comments may be sent by fax to (202) 
874-5274, or by electronic mail to [email protected]. You may 
personally inspect and photocopy comments at the OCC, 250 E Street, 
SW., Washington, DC. For security reasons, the OCC requires that 
visitors make an appointment to inspect comments. You may do so by 
calling (202) 874-4700. Upon arrival, visitors will be required to 
present valid government-issued photo identification and to submit to 
security screening in order to inspect and photocopy comments.
    Additionally, you should send a copy of your comments to OCC Desk 
Officer, 1557-0202, by mail to U.S. Office of Management and Budget, 
725 17th Street, NW., 10235, Washington, DC 20503, or by fax 
to (202) 395-6974.

FOR FURTHER INFORMATION CONTACT: You can request additional information 
or a copy of the collection from Ira Mills or Mary H. Gottlieb, 
Clearance Officers, (202) 874-5090, Legislative and Regulatory 
Activities Division, Office of the Comptroller of the Currency, 250 E 
Street, SW., Washington, DC 20219.

SUPPLEMENTARY INFORMATION: The OCC is proposing to extend OMB approval 
of the following information collection:
    Title: Loans in Areas Having Special Flood Hazards--12 CFR parts 22 
and 172.
    OMB Control Number: 1557-0202.
    This collection of information is set forth in OCC regulations at 
12 CFR Parts 22 and 172 and is required by section 303(a) \1\ and title 
V of the Riegle Community Development and Regulatory Improvement 
Act,\2\ the National Flood Insurance Reform Act of 1994 amendments to 
the National Flood Insurance Act of 1968,\3\ and the Flood Disaster 
Protection Act of 1973.\4\
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    \1\ 12 U.S.C. 4804.
    \2\ 42 U.S.C. 4104(a).
    \3\ 12 U.S.C. 4104(a) and 4104(b).
    \4\ 12 U.S.C. 4012(a) and 4106(b).
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    The collections of information pertain to loans secured by 
buildings and mobile homes located or to be located in areas determined 
by the director of the Federal Emergency Management Agency (FEMA) to 
have special flood hazards. Sections 22.6 and 172.6 apply to loans 
secured by buildings or mobile homes, regardless of location.
    This collection of information, which previously applied only to 
national banks, has been merged with former OTS OMB Control No. 1550-
0281. On July 21, 2010, the Dodd-Frank Wall Street Reform and Consumer 
Protection Act, Pub. L. 111-203, 124 Stat. 1376 (2010) (Dodd-Frank Act) 
was enacted. As part of the comprehensive package of financial 
regulatory reform measures enacted, Title III of the Dodd-Frank Act 
transfers the powers, authorities, rights and duties of the Office of 
Thrift Supervision to other banking agencies, including the OCC, on the 
``transfer date.'' The transfer date is July 21, 2011. As a result, the 
OCC now regulates both national banks and Federal savings associations.
    Notices and Disclosure Requirements:
    12 CFR 22.6, 172.6--Required Use of Standard Flood Hazard 
Determination

[[Page 48944]]

Form--A national bank or Federal savings association must use the 
Standard Flood Hazard Determination Form developed by FEMA and must 
maintain a copy of the completed form for the period the bank or 
savings association owns the loan.
    12 CFR 22.7, 172.7--Notice of Forced Placement of Flood Insurance--
If the borrower has not obtained required flood insurance or has 
purchased inadequate coverage, a national bank, Federal savings 
association, or its loan servicer must notify the borrower that the 
borrower should obtain adequate flood insurance coverage (forced 
placement notice). The forced placement notice informs the borrower of 
the amount of flood insurance to purchase. If the borrower fails to 
purchase insurance, the bank, savings association, or its servicer will 
purchase insurance on the borrower's behalf and may charge the borrower 
for the premiums and fees.
    12 CFR 22.9, 172.9--Notice to Borrower and Servicer--A national 
bank or Federal savings association making, extending, increasing or 
renewing a loan secured by property located in a special flood hazard 
area must provide a notice to the borrower and loan servicer (borrower 
notice). The borrower notice advises the borrower that the property 
securing the loan is located in a special flood hazard area and that 
flood insurance on the property securing the loan is required. It 
includes a description of the flood insurance purchase requirements and 
provides the borrower with information regarding whether flood 
insurance is available under the National Flood Insurance Program and 
the availability of Federal assistance in the event of a declared 
Federal flood disaster. The notice is used by the borrower to make 
borrowing decisions, including the collateral to be used to secure the 
loan. The notice is used by the loan servicer to carry out its 
servicing responsibilities.
    12 CFR 22.10, 172.10--Notices to FEMA--A national bank or Federal 
savings association making, increasing, extending, renewing, selling or 
transferring a loan secured by property located in a special flood 
hazard area must notify the Director of FEMA (or FEMA's designee) of 
the identity of the loan servicer (notice of servicer), and must notify 
the Director of FEMA of any change in the loan servicer (notice of 
servicer transfer) within 60 days of such change. FEMA uses the notice 
of servicer and notice of servicer transfer to maintain current 
information regarding to whom to direct notices or inquiries regarding 
flood insurance or to send notices of flood insurance policy renewals.

Recordkeeping Requirements

    12 CFR 22.6(b), 172.6(b)--Retention of Standard Flood Hazard 
Determination Form--A national bank or Federal savings association must 
retain a copy of the completed Standard Flood Hazard Determination Form 
for the period of time the bank or savings association owns the loan. 
The OCC uses this record to verify regulatory compliance.
    12 CFR 22.9 and 172.9, paragraphs (d) and (e)--Record of Borrower 
and Servicer Receipt of Notice and Alternate Method of Notice--A 
national bank or Federal savings association must retain a record of 
the receipt of the borrower notice by the borrower and the loan 
servicer for the period of time the bank or savings association owns 
the loan. In lieu of providing the borrower notice, a bank or savings 
association may obtain a satisfactory written assurance from a seller 
or lessor that, within a reasonable time before completion of the sale 
or lease transaction, the seller or lessor has provided such notice to 
the purchaser or lessee. The bank or savings association must retain a 
record of the written assurance from the seller or lessor for the 
period of time the bank owns the loan. The OCC uses these records to 
verify regulatory compliance.
    An agency may not conduct or sponsor, and a respondent is not 
required to respond to, an information collection unless the 
information collection displays a currently valid OMB control number.

Solicitation of Comment

    On January 14, 2011, the OCC published a notice in the Federal 
Register (76 FR 2753) soliciting comments for 60 days on the proposed 
extension of the information collection. One comment, from a trade 
association, was received.
    The commenter asserted that the OCC's burden estimates were 
understated. They further stated that the accuracy of the estimates is 
essential to the reduction of regulatory burden and policy discussions 
regarding the future of the national flood insurance program.
    The commenter cited to Executive Order 13563 (E.O.), which 
emphasizes the importance of reducing regulatory burdens and cost. The 
E.O. requires that agencies: Use the best, most innovative, and least 
burdensome tools to achieve regulatory goals; take into account 
quantitative and qualitative costs and benefits; ensure that 
regulations are accessible, consistent, written in plain language, and 
easy to understand; and measure and strive to improve the results of 
regulatory requirements. These requirements must be satisfied any time 
a regulation is changed. Because this information collection renewal 
involves no changes to the OCC's flood insurance regulations, the 
executive order does not apply.
    The commenter also cited to OMB's Implementing Guidance for OMB 
Review of Agency Information Collection, which requires that the 
following be included in estimates of burden for covered information 
collections: Design, procurement, and operation of data collection, 
data management and data reporting systems; response to changes in the 
requirements of an existing information collection; training staff on 
how to comply with the collection; time and resources required to 
perform all required tasks and certifications; and time and resources 
required to transmit the collection to the OCC or a third party. The 
design, procurement, and operation of the systems required to conduct 
the information collection are regarded as one-time start up costs that 
are phased out over time. The estimates provided were intended to cover 
the time and resources required to perform all required tasks and 
certifications and transmit required information to the OCC or a third 
party. There have been no changes in the requirements of the 
collection, therefore no time has been allotted for this item in the 
burden estimates. Lastly, the burden estimates do not include time 
devoted to ongoing training as the regulations contain no training 
requirement. In this case, the training of staff is considered a usual 
and customary business practice, which does not require that PRA burden 
be taken.
    The commenter indicated that the OCC's estimate of 15 minutes per 
loan could only include the time required to complete the 
administrative tasks involved and not the time spent on procedures, 
systems, and monitoring to ensure compliance. They reference the 
``Interagency Questions and Answers Regarding Flood Insurance'' issued 
in 2009, which reflects the complexity of compliance with the mandatory 
purchase obligation of the flood insurance statutes and regulations. 
Their members reported to them that one hour per loan is a more 
accurate estimate.
    The commenter set out the following recommendations for revised 
burden estimates:
     Determining whether a building or mobile home offered as 
collateral will be located in a special flood hazard area:

[[Page 48945]]

    [cir] 5-30 minutes per file to order the determination and review 
the completed form.
    [cir] Time expended for commercial loans may be considerably longer 
than that for a less complicated consumer loan--20-30 minutes or more 
per file.
     Providing the borrower and loan servicer with warning 
notice that the building securing the loan is located in a special 
flood hazard area:
    [cir] 5 minutes per loan to prepare and send the notice to the 
borrower.
    [cir] Most borrowers have questions about the determination and how 
to obtain insurance. The time required to assist borrowers may take 
from 5-10 minutes to several hours. If appropriate, the bank will make 
a joint request with the borrower to FEMA for a Letter of Determination 
Review.
     Ensuring that the borrower maintains flood insurance 
throughout the life of the loan; notify the borrower of the obligation 
and explain the force placement process:
    [cir] The burden estimates should include the significant amounts 
of time required for the compliance structure necessary to ensure that 
lapses are discovered, notice is provided, and force placement occurs 
when necessary.
    [cir] Banks have loan servicing review procedures to ensure 
continuous coverage, which require loan file reviews averaging 10 
minutes. If a lapse is discovered, an additional 15-25 minutes is 
required to send the 45-day notice to the borrower, monitor whether the 
insurance is purchased, and purchase a force placed policy when 
necessary.
    [cir] FEMA regularly updates flood insurance rate maps to address 
changing risks. In the case of remapping, banks must order new 
determinations, notify customers if the structure is in a special flood 
hazard area, review policy adequacy, and force place a policy if 
necessary. Remapping requires a minimum of 30 minutes per file.
    [cir] Interagency Q&As urge banks to conduct file reviews for 
purchased loans, loan participations, or syndication agreements. 
Depending on complexity, conducting the reviews and sending necessary 
notices requires 10-30 minutes.
     Notifying FEMA in writing of the identity of the servicer 
and any change in servicer requires 2 minutes per loan.
     Compliance monitoring and auditing to ensure compliance 
requires 20 minutes per loan.
     Training for employees requires an average of 2 hours per 
employee each year.
     Revising procedures pursuant to the OCC's final Q&As \5\ 
will require at least two hours.
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    \5\ 74 FR 35914 (July 21, 2009).
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    In response to the commenter's recommendations for revised burden 
estimates, the OCC has the following responses and revised estimates. 
OCC has not taken any burden for Requests for Flood Zone Determination 
Review, as they are accomplished using FEMA forms approved under OMB 
Control No. 1660-0040. Assisting borrowers is a usual and customary 
business practice for which the OCC is not required to take burden 
under the PRA. There is no specific requirement for bank review of 
Flood Insurance Rate Maps and, therefore, the OCC has not taken burden 
for this procedure. In addition, the flood insurance regulation does 
not state that banks with loans in the affected area must undertake 
another loan file review. Lastly, there is no specific requirement in 
the Q&As for banks to conduct file reviews or for revision of policies 
and procedures to reflect the Q&As. Any such reviews or revisions would 
be usual and customary business practices and, therefore, the OCC is 
not required to take that PRA burden.
    The OCC has considered the comment and has adjusted its revised 
estimates. The revised estimates are as follows:
     Retention of standard FEMA form: 2.5 minutes.
     Notice of special flood hazards to borrowers and 
servicers: 5 minutes.
     Notice to FEMA of servicer: 5 minutes.
     Notice to FEMA of change of servicer: 5 minutes.
     Notice to borrowers of lapsed mandated flood insurance: 5 
minutes.
     Purchase of flood insurance on the borrower's behalf: 15 
minutes.
     Notice to borrowers mandated flood insurance due to 
remapping: 5 minutes.
     Purchase flood insurance on the borrower's behalf due to 
remapping: 15 minutes.
    Comments continue to be invited on:
    (a) Whether the collection of information is necessary for the 
proper performance of the functions of the OCC, including whether the 
information shall have practical utility;
    (b) The accuracy of the OCC's estimate of the burden of the 
collection of information;
    (c) Ways to enhance the quality, utility, and clarity of the 
information to be collected;
    (d) Ways to minimize the burden of the collection on respondents, 
including through the use of automated collection techniques or other 
forms of information technology; and
    (e) Estimates of capital or start-up costs and costs of operation, 
maintenance, and purchase of services to provide information.
    Type of Review: Regular review.
    Affected Public: Businesses or other for-profit.
    Burden Estimates:
    The OCC estimates that there are 871 HMDA national bank reporters 
who make an average of 3,591 home loans and 517 HMDA savings 
association reporters who make an average of 1,438 loans. There are an 
additional 716 national banks and 147 savings associations that are not 
HMDA reporters making on average 20 home loans. Thus, there are 1,587 
national banks and 664 Federal savings associations that make on 
average 1,980 and 1,124 home loans, respectively. Of these loans, 20% 
(396 and 225 loans, respectively) are estimated to be in a Special 
Flood Hazard Area and require a notice to FEMA or its designee of the 
identity of the servicer. Of that 20%, 50% (198 and 112 loans, 
respectively) are estimated to require an additional notice to FEMA or 
its designee of a change in the identity of the servicer. Of the 20% of 
loans that are estimated to be in a Special Flood Hazard Area, 20% (79 
and 45 loans, respectively) are estimated to have a lapse or 
underinsured situation that would require a notice to the borrower. Of 
the 20% that had a lapse or inadequate coverage, 25% (20 and 11 loans, 
respectively) would require the bank to issue a force placed policy.
    Two percent of the home loans made will require the national bank 
or Federal savings association to provide notice to the borrower of the 
mandatory purchase requirement due to a remapping issue (40 and 22 
loans, respectively). Of that 2%, 50% would require the bank or savings 
association to issue a force placed policy (20 and 11 loans, 
respectively).
    Recordkeeping:
    Retention of Standard FEMA Form:
HMDA national banks:
    871 respondents x 3,591 annual frequency x 2.5 minutes = 130,323 
hours.
HMDA savings associations:
    517 respondents x 1,438 annual frequency x 2.5 minutes = 30,977 
hours.
Non-HMDA national banks:
    716 x 20 annual frequency x 2.5 minutes = 597 hours.
Non-HMDA savings associations:
    147 respondents x 20 annual frequency x 2.5 minutes = 123 hours.
    Total Recordkeeping Burden: 162,020 hours.

[[Page 48946]]

    Disclosures:
Notice of Special Flood Hazards to Borrowers and Servicers:
    1,587 national banks x 396 responses x 5 minutes per response = 
52,371 hours.
    664 Federal savings associations x 225 responses x 5 minutes per 
response = 12,450 hours.
Notice to FEMA of Servicer:
    1,587 national banks x 396 responses x 5 minutes per response = 
52,371 hours.
    664 Federal savings associations x 225 responses x 5 minutes per 
response = 12,450 hours.
Notice to FEMA of change of Servicer:
    1,587 national banks x 198 responses x 5 minutes per response = 
26,186 hours.
    664 Federal savings associations x 112 responses x 5 minutes per 
response = 6,197 hours.
Notice to Borrowers of Lapsed Mandated Flood Insurance:
    1,587 national banks x 79 responses x 5 minutes per response = 
10,448 hours.
    664 Federal savings associations x 45 responses x 5 minutes per 
response = 2,490 hours.
Purchase Flood Insurance on the Borrower's Behalf:
    1,587 national banks x 20 responses x 15 minutes per response = 
7,935 hours.
    664 Federal savings associations x 11 responses x 15 minutes per 
response = 1,826 hours.
Notice to Borrowers of Mandated Flood Insurance due to Remapping:
    1,587 national banks x 40 responses x 5 minutes per response = 
5,290 hours.
    664 Federal savings associations x 22 responses x 5 minutes per 
response = 1,217 hours.
Purchase Flood Insurance on the Borrower's Behalf due to Remapping:
    1,587 national banks x 20 responses x 15 minutes per response = 
7,935 hours.
    664 Federal savings associations x 11 responses x 15 minutes per 
response = 1,826 hours.
    Total Disclosure Burden: 200,992.
    Total Burden: 363,012 hours.

    Dated: July 29, 2011 .
Michele Meyer,
Assistant Director, Legislative & Regulatory Activities Division, 
Office of the Comptroller of the Currency.
[FR Doc. 2011-19785 Filed 8-8-11; 8:45 am]
BILLING CODE 4810-33-P