Hi, does anyone know what 12 CFR 22.10 (a) requires financial institutions to do? How is this notice to FEMA typically completed?

Thank you.

Most financial institutions accomplish the notice of servicer's identity requirements by ensuring they are listed as the loss payee on the borrower's (or their own forced placed) flood insurance policy. When servicing is sold, the seller is responsible notify the insurance agent (or the FEMA).

From the flood FAQs:

45. When a regulated lender makes a designated loan and will be servicing that loan, what are the
requirements for notifying the Director of FEMA or the Director’s designee?

Answer: FEMA stated in a June 4, 1996, letter that the Director’s designee is the insurance company issuing the flood insurance policy. The borrower’s purchase of a policy (or the regulated lender’s force placement of a policy) will constitute notice to FEMA when the regulated lender is servicing that loan. In the event the servicing is subsequently transferred to a new servicer, the regulated lender must provide notice to the insurance company of the identity of the new servicer no later than 60 days after the effective date of such a change.

FAQs 46 - 50 provide additional guidance on notification requirements.

Thank you - very helpful. We're always listed as loss payee on insurance policies, so it sounds like we are covered.

Is the insurance company still responsible to notify FEMA on private flood policies if the bank is listed as lien holder?

Why would FEMA be notified on a private policy?

It said above the insurance company would notify FEMA of the servicer, so I was wondering on a private policy if they are required to notify FEMA of the servicer.

§ 339.10 Notice of servicer's identity.

(a) Notice requirement. When an FDIC-supervised institution makes, increases, extends, renews, sells, or transfers a loan secured by a building or mobile home located or to be located in a special flood hazard area, the FDIC-supervised institution shall notify the Administrator of FEMA (or the Administrator of FEMA's designee) in writing of the identity of the servicer of the loan. The Administrator of FEMA has designated the insurance provider to receive the FDIC-supervised institution's notice of the servicer's identity. This notice may be provided electronically if electronic transmission is satisfactory to the Administrator of FEMA's designee.

We had the same question, because the reg requirement is silent on private policies and does FEMA care if they aren't underwriting the policy.