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#211097 - 07/14/04 08:39 PM Standard Flood Determination
Anonymous
Unregistered

Here's a question for you oldies but goodies! When did the requirement to use the Standard Flood Notice come into effect? I have an OTS examiner here who is writing up a loan originated in 1993 because I don't have a Standard Flood Determination form in the file. The loan has flood insurance, and has always had it since its origination, but the only notice in the file is the one where the appraiser told us the property was in a flood zone. The notice to our borrower is a non-standard notice as well, but does contain all the required language.

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#211098 - 07/14/04 08:41 PM Re: Standard Flood Determination
ComplianceFool Offline
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SXM ;) Wishful thinking!
Sorry, I didn't realize that I wasn't logged in. This is my question, and I don't need to be Anonymous!
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#211099 - 07/14/04 09:00 PM Re: Standard Flood Determination
Anonymous
Unregistered

All I can find is in the FEMA Madadotory Guidelines - Page 33 -effective January 2, 1996

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#211100 - 07/14/04 09:08 PM Re: Standard Flood Determination
Andy_Z Offline
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The required form was, I believe, mandated in the Riegle Community Development Act of 1994. The form came out after that.

Oldie Goodie
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#211101 - 07/14/04 09:14 PM Re: Standard Flood Determination
Andy_Z Offline
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ABA Compl. Mag, Oct. 95 says the National Flood Ins. Reform Act of 1994 (Sept. 23, 1994) imposed section 528 dealing with a Special Hazard Determination Form and gave 15 months until enactment.

The original form was in the Federal Register, 60 FR 35286 and had 180 days from publication to be used, requiring it on Jan. 2, 1996.
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#211102 - 07/14/04 09:16 PM Re: Standard Flood Determination
Dan Persfull Offline
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Bloomington, IN
If I'm not mistaken (and I didn't research this) the mandatory use of the form was part of the 1994 Reform Act and was implemented 10/96.

IMO, a loan made prior to 1996 would not be required to have the SFHDF, unless it has been renewed, extended, etc.
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#211103 - 07/14/04 09:18 PM Re: Standard Flood Determination
Andy_Z Offline
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Sorry for the multiple posts. The OCC's flood exam manual also quotes a Jan. 2, 1996 date, noting the form was revised Oct. 1998.

Who is your regulator?
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AndyZ CRCM
My opinions are not necessarily my employers.
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#211104 - 07/14/04 09:32 PM Re: Standard Flood Determination
Anonymous
Unregistered

The form was first published by FEMA in the July 6, 1995 issue of the Federal Register. In that same issue, the federal banking agencies also published a final rule updating their flood insurance regulations to require the use of the form. The rule was effective 1/2/96. If you click on the following link http://www.gpoaccess.gov/fr/advanced.html search the 1995 issue, select final rules, enter the date of 07/06/1995, and then search for the phrase "flood hazard determination" and you will be able to find these documents.

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#211105 - 07/14/04 09:32 PM Re: Standard Flood Determination
Dan Persfull Offline
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Bloomington, IN
I found this with a Google search.

It shows the effective date October 1, 1996. About a third of the way down it discusses the comments made on the use of the SFHDF and in their infamous words The agencies adopt this provision as proposed.

I didn't do any additional searches.
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#211106 - 07/14/04 09:57 PM Re: Standard Flood Determination
Anonymous
Unregistered

I think the October 1996 date had to do with the requirement to escrow for flood insurance premiums if you collected escrow for property taxes or PMI or hazard insurance. Here is part of the text of the OTS flood insurance regulations that addresses this.

" 572.5 Escrow requirement.
If a savings association requires the escrow of taxes, insurance premiums, fees, or any other charges for a loan secured by residential improved real estate or a mobile home that is made, increased, extended, or renewed on or after October 1, 1996, the savings association shall also require the escrow of all premiums and fees for any flood insurance required under 572.3."

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#211107 - 07/14/04 10:02 PM Re: Standard Flood Determination
yy2say Offline
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Quote:

Who is your regulator?




I think they mentioned the OTS
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#211108 - 07/14/04 10:03 PM Re: Standard Flood Determination
yy2say Offline
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...and in my opinion, they are digging pretty deep. When was your last compliance examination?
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#211109 - 07/15/04 01:58 AM Re: Standard Flood Determination
Kathleen O. Blanchard Offline

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We had an OCC exam in January and looking for the "correct form" of determination was on their checklist for flood compliance!
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#211110 - 07/15/04 12:26 PM Re: Standard Flood Determination
DMG Offline
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Midwest
The loan was originated in 1993?? That is pretty deep.

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#211111 - 07/15/04 12:49 PM Re: Standard Flood Determination
ComplianceFool Offline
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SXM ;) Wishful thinking!
Yep, they are on a witch hunt I think! This OTS guy wrote up a scathing comment listing over 13 violations. I received it at 4 PM yesterday. By 8:30 this morning, I had eliminated every single one of them! The OTS has just begun training their S&S examiners in compliance, and I think this guy must be new. We just had a compliance exam last year and came out clean as a whistle. OTS is under the gun I think, with the consolidation of the industry.

Thanks to all of you for allowing me to eliminate the last two exceptions!!
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#211112 - 07/15/04 05:35 PM Re: Standard Flood Determination
DMG Offline
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Midwest
Couple that with what's been happening at Riggs and you have so pretty skittish examiners.

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#211113 - 07/15/04 08:14 PM Re: Standard Flood Determination
RR Sarah Offline
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RR Sarah
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Up North
Kaybee--So that's all they were looking for? OCC examiners will be here in two weeks and they said they would be looking at our flood determination. I've been driving myself nuts trying to make sure our flood maps are update, using the right community code, etc.
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#211114 - 07/16/04 03:14 AM Re: Standard Flood Determination
Anonymous
Unregistered

We recently had an OCC compliance exam. Let me tell you....your flood better be in tip top shape. They found a few flood violations of which were from loans that we inherited out of an acquisition. Are you doing your own flood determinations? We use a third party provider. They requested a list from the providers of those determinations optained is SFHA's. Then they pulled all the loans to review. You will need to demonstrate you know which loans are in a SFHA. The reviewed GFE's and HUD's to ensure the fee was listed and assessed appropriately. If properties were in SFHA's they are looking for copies of the notices to ensure they were sent timely. They also reviewed flood insurance policies to ensure coverage was appropriate. If you force placed insurance you need to show your notices sent. Needless to say, it got ugly in our exam. We may be assessed CMP's for the violations cited. Our previous flood review was good. If they find a couple of violations they will dig and definately go on a major witch hunt.

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#211115 - 07/16/04 04:22 AM Re: Standard Flood Determination
Kathleen O. Blanchard Offline

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Quote:

Kaybee--So that's all they were looking for? OCC examiners will be here in two weeks and they said they would be looking at our flood determination. I've been driving myself nuts trying to make sure our flood maps are update, using the right community code, etc.




For flood,the OCC was checking for the determination (and checked the date vs. the loan), the notification to the customer, the signature on the notification, whether the property was in a flood zone, the insurance, whether the amount of insurance was sufficient, and they checked for renewals.

They were quite thorough. And each error is a separate violation (so, no determination, no notice, no signature, no insurance - 4 violations on one loan). They do soften the message slightly by saying "4 of the violations were for one loan". (Naturally, this was a commercial loan.) We did also have an in depth discussion on renewals with the same determination with life of loan coverage, but they ended up agreeing we were okay.
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#211116 - 07/16/04 01:32 PM Re: Standard Flood Determination
RR Sarah Offline
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RR Sarah
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Up North
Geez, I'm glad I read this thread. I guess I'll dive back into the files! Thanks for the tips on OCC Kaybee and Anon.
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#211117 - 07/16/04 01:40 PM Re: Standard Flood Determination
Dan Persfull Offline
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Bloomington, IN
The FDIC did the same in my last compliance exam (8/03).
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#211118 - 07/16/04 02:58 PM Re: Standard Flood Determination
Deena Offline
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Deena
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PA
Ditto for the Fed - just last month.
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#211119 - 07/16/04 04:02 PM Re: Standard Flood Determination
Truffle Royale Offline

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Double that ditto for Feds, here in May. They weren't too hard but we were in good shape before they got here, if I do say so myself.

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#211120 - 07/16/04 08:32 PM Re: Standard Flood Determination
ComplianceFool Offline
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SXM ;) Wishful thinking!
The Riggs issue is utmost in their minds right now, for sure! They are all over our BSA too, and we are a small, low profile savings bank is a podunk town. We have very few commercial accounts and don't even cash checks for non-customers, much less sell official checks or travelers checks! Still in all, I think we're OK there too.
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#211121 - 03/22/06 09:19 PM Re: Standard Flood Determination
jap Offline
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jap
Joined: Mar 2004
Posts: 600
IN
Apologies for reviving this old post but I have a related question. Before the form was required, was there any requirement as to how banks were to document that they checked which zone the property was in?
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