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Revised Comptroller’s Handbook Booklet Issued
On Thursday, September 7, 2017, the OCC issued the “Flood Disaster Protection Act” booklet of the Comptroller’s Handbook. This revised booklet replaces a similarly titled booklet issued in May of 1999. The revised booklet provides information on changes to the flood insurance requirements resulting from recent amendments to the Flood Disaster Protection Act (FDPA) and the flood insurance regulations (12 CFR 22) and makes other clarifying changes. These changes include an exemption for certain detached structures from the mandatory purchase of flood insurance requirements; escrow requirements for flood insurance premiums and fees for any loan secured by residential real estate or a mobile home that is made, increased, extended, or renewed on or after January 1, 2016; and amendments related to the force placement of flood insurance.
Updates to the “Flood Disaster Protection Act” booklet reflect:
- The exemption for certain detached structures from the requirement to purchase flood insurance;
- The requirement for a bank, or a servicer acting on its behalf, to escrow premiums and fees for flood insurance for any loan secured by residential improved real estate or a mobile home that is made, increased, extended, or renewed on or after January 1, 2016;
- The requirement for a bank that is subject to the escrow requirement to offer and make available to borrowers the option to escrow flood insurance premiums and fees for loans that are outstanding as of January 1, 2016;
- Changes to the force placement provision of the FDPA clarifying that a bank, or a servicer acting on its behalf, has authority to charge a borrower for the cost of force-placed flood insurance coverage beginning on the date the borrower-purchased coverage lapsed or became insufficient; and
- Examination procedures for determining compliance with the detached structure, escrow, and force placement provisions.