The FDIC Flood summary states this:
Forced Placement of Flood Insurance (12 C.F.R. § 339.7)
Lenders must force place insurance (purchase coverage on the borrower’s behalf) in situations where a borrower either does not obtain required flood insurance coverage before closing a loan, or allows flood insurance coverage to lapse after the loan is made. The lender must purchase the insurance within 45 days of notifying the borrower that coverage is required. Federal flood insurance regulations permit no discretion in these situations. The borrower may be charged the premium or fee incurred.

Does this allow for a bank to force place a policy prior to closing effective on the closing day for a loan in a flood zone if the borrower doesn't want to find their own coverage?

No - it does not. You cannot force place coverage to make a new loan.

I know I am going to get pushback on this from staff. What is the above saying then about before closing the loan? I have my theory but know what won't "hold water".

Because it is not what the regulations say. 339.7 only covers ": at any time during the term of a designated loan".

§ 339.7 Force placement of flood insurance.
(a) Notice and purchase of coverage. If an FDIC-supervised institution, or a servicer acting on its behalf, determines at any time during the term of a designated loan, that the building or mobile home and any personal property securing the designated loan is not covered by flood insurance or is covered by flood insurance in an amount less than the amount required under § 339.3, then the FDIC-supervised institution or its servicer shall notify the borrower that the borrower should obtain flood insurance, at the borrower's expense, in an amount at least equal to the amount required under § 339.3, for the remaining term of the loan. If the borrower fails to obtain flood insurance within 45 days after notification, then the FDIC-supervised institution or its servicer shall purchase insurance on the borrower's behalf. The FDIC-supervised institution or its servicer may charge the borrower for the cost of premiums and fees incurred in purchasing the insurance, including premiums or fees incurred for coverage beginning on the date on which flood insurance coverage lapsed or did not provide a sufficient coverage amount.

If your borrower is refusing to obtain coverage now, it's pretty indicative of how this loan relationship is going to go. Further, you are not licensed to sell insurance, so obtaining this policy for the borrower willingly, some might argue, puts you in the position of selling insurance.

Read Randy's cite in correlation to 339.3. Closing a loan without flood insurance violates 339.3

Does this allow for a bank to force place a policy prior to closing

If the loan has not closed then there is no contract between the bank and the borrower therefore you have no legal basis for force placing the insurance.

And Norm brings up a scenario I haven't thought about. If you sell the borrower a policy through your vendor in order to close the loan are you acting as an agent and therefore would have to be licensed to sell insurance? In this case most likely both the individual and the bank would have to be licensed.

Selling the borrower a policy prior to closing would not be the same as purchasing a force placed policy on their behalf. The first scenario is a voluntary insurance transaction, the second is required by Federal law.