Newsroom

June 19, 2015

Final flood insurance rule, minority institution policy adopted

NCUA's board on Thursday gave its approval to an interagency final rule that requires the escrow of flood insurance payments on residential improved real estate securing a loan.

The final rule has provisions that take effect this Oct. 1 and on Jan. 1, 2016. The final rule implements 2014 revisions to the 2012 Biggert-Waters flood insurance reform law.

While requiring escrows, the final rule also incorporates an exemption from the mandatory flood insurance purchase requirement for small lenders, defined as lenders under $1 billion, and certain detached structures. It also addresses forceplacement of flood insurance. The private flood insurance provisions in Biggert-Waters will be addressed in a future rulemaking.

NAFCU shared concerns with NCUA over the costs of the escrow provision but welcomes the rule's clear exemption for lenders with less than $1 billion in assets.

In other action Thursday, the board approved Interpretive Ruling and Policy Statement 13-1, Minority Depository Institution Preservation Program; and was briefed by staff on the recently approved, interagency policy statement on standards for assessing financial institutions' diversity policies and practices.

NAFCU supports NCUA's efforts to aid in the growth and survival of minority depository institutions. IRPS 13-1 takes effect 60 days after publication in the Federal Register.

Comments on information collection related to the interagency policy on diversity practices are due Aug. 10.