BOARD OF GOVERNORS

OF THE

FEDERAL RESERVE SYSTEM

WASHINGTON, D.C. 20551

DIVISION OF CONSUMER AND

COMMUNITY AFFAIRS

CA 19-10 

August 22, 2019 

TO THE OFFICERS AND MANAGERS IN CHARGE OF CONSUMER AFFAIRS 

SECTIONS:

Applicability to Community Banking Organizations: This guidance applies to 

institutions supervised by the Federal Reserve with total consolidated assets of $10 

billion or less. 

SUBJECT: Revised Interagency Examination Procedures for the Flood Disaster 

Protection Act

The Task Force on Consumer Compliance of the Federal Financial Institutions 

Examination Council recently updated the attached interagency examination procedures 

for the Flood Disaster Protection Act (FDPA). These revised procedures supersede the 

FDPA interagency examination procedures transmitted with CA 16-1. 

The attached procedures reflect a February 2019 final interagency rule that 

addresses the private flood insurance provisions of the Biggert-Waters Flood Insurance 

Reform Act of 2012. These procedures incorporate new sections that discuss the 

following aspects of the final private flood insurance rule: 

• mandatory acceptance of a private insurance policy to satisfy the flood insurance 

purchase requirement if the policy meets the statutory and regulatory definition of 

“private flood insurance;” 

• discretionary acceptance of a flood insurance policy issued by a private insurer, 

even if the policy does not meet the statutory and regulatory definition of “private 

flood insurance;” and 

• discretionary acceptance of a plan issued by a mutual aid society in satisfaction of 

the flood insurance purchase requirement, if certain criteria are met. 
2 

Board Consideration of Mutual Aid Society Plans

 The February 2019 revision to the flood insurance regulations provides a 

definition of a “mutual aid society” and describes the conditions under which a regulated 

lending institution may accept a flood protection plan issued by a mutual aid society. 

Within the Board’s Regulation H, 12 CFR 208.25(c)(3)(iv) enumerates those conditions. 

The first of the conditions for acceptability of a mutual aid plan requires that “the Board 

has determined that such plans qualify as flood insurance for purposes of the [National 

Flood Insurance] Act.” Under the Board’s interpretation of the National Flood Insurance 

Act, if the mutual aid society issuing the mutual aid plan is recognized as an “insurer” or 

the mutual aid plan is recognized as “insurance” by the State in which the property is 

located, then the plan would qualify as flood insurance for purposes of the Act. 

The Board recognizes that state member banks may not typically analyze mutual 

aid society plans in the course of their lending activities. Therefore, Federal Reserve staff 

will assist state member banks in determining whether a mutual aid plan meets the 

Federal Reserve’s conditions for acceptance. In order to request review of a mutual aid 

society plan, a state member bank should provide the plan, along with any supporting 

State-specific regulatory information pertaining to the State in which the property is 

located, to its responsible Reserve Bank prior to accepting the plan. The Reserve Bank 

may coordinate with Board staff to obtain a determination regarding the acceptability of 

that plan in satisfaction of the flood insurance purchase requirement. 

Importantly, because the Board’s determination is based upon the laws and 

regulations of the State in which the property is located, acceptance of a mutual aid 

society plan in one State will not apply to the acceptability of that plan in other States. 

Any mutual aid society plan submitted for consideration will be reviewed within the 

context of the applicable State’s laws and regulations. 

If you have any questions, please contact Lanette Meister, Senior Supervisory 

Consumer Financial Services Analyst, at (202) 452-2705, or Jeremy Hochberg, 

Managing Counsel, at (202) 452-6496. In addition, questions may be sent via the 

Board’s public website.1

Sincerely, 

Suzanne Killian

Senior Associate Director

Attachment: Interagency Examination Procedures for the Flood Disaster Protection Act 

Supersedes: CA 16-1 “Revised Interagency Examination Procedures for the Flood 

Disaster Protection Act” (April 7, 2016) 

 

1 See http://www.federalreserve.gov/apps/contactus/feedback.aspx.