75742 Federal Register / Vol. 79, No. 244 / Friday, December 19, 2014 / Rules and Regulations 

1Public Law 111–203, 124 Stat. 1376 (2010) 

(codified at 12 U.S.C. 5301 et seq.). 2 76 FR 39247 (July 6, 2011). 

PART 140—FINANCIAL PROTECTION 

REQUIREMENTS AND INDEMNITY 

AGREEMENTS 

■ 49. The authority citation for part 140 

continues to read as follows: 

Authority: Atomic Energy Act secs. 161, 

170, 223, 234 (42 U.S.C. 2201, 2210, 2273, 

2282); Energy Reorganization Act secs. 201, 

as amended, 202 (42 U.S.C. 5841, 5842); 

Government Paperwork Elimination Act sec. 

1704 (44 U.S.C. 3504 note); Energy Policy Act 

of 2005 Pub. L. 109–58, 119 Stat. 594 (2005). 

■ 50. In part 140, wherever it may occur, 

remove the phrase ‘‘Director, Office of 

Federal and State Materials and 

Environmental Management Programs,’’. 

PART 150—EXEMPTIONS AND 

CONTINUED REGULATORY 

AUTHORITY IN AGREEMENT STATES 

AND IN OFFSHORE WATERS UNDER 

SECTION 274 

■ 51. The authority citation for part 150 

continues to read as follows: 

Authority: Atomic Energy Act sec. 161, 

181, 223, 234 (42 U.S.C. 2201, 2021, 2231, 

2273, 2282); Energy Reorganization Act sec. 

201 (42 U.S.C. 5841); Government Paperwork 

Elimination Act sec. 1704 (44 U.S.C. 3504 

note); Energy Policy Act of 2005, Pub. L. 

109–58, 119 Stat. 594 (2005). 

Sections 150.3, 150.15, 150.15a, 150.31, 

150.32 also issued under Atomic Energy Act 

secs. 11e(2), 81, 83, 84 (42 U.S.C. 2014e(2), 

2111, 2113, 2114). 

Section 150.14 also issued under Atomic 

Energy Act sec. 53 (42 U.S.C. 2073). 

Section 150.15 also issued under Nuclear 

Waste Policy Act secs. 135 (42 U.S.C. 10155). 

Section 150.17a also issued under Atomic 

Energy Act sec. 122 (42 U.S.C. 2152). 

Section 150.30 also issued under Atomic 

Energy Act sec. 234 (42 U.S.C. 2282). 

■ 52. In part 150, wherever it may occur, 

the phrase in the left column in the 

following table is removed and the 

phrase in the right column is added in 

its place. 

Remove Add 

Office of Federal and State Materials and Environmental Management 

Programs.

Office of Nuclear Material Safety and Safeguards. 

Division of Fuel Cycle Safety and Safeguards ........................................ Division of Fuel Cycle Safety, Safeguards, and Environmental Review. 

Dated at Rockville, Maryland, this 9th day 

of December, 2014. 

For the Nuclear Regulatory Commission. 

Roy P. Zimmerman, 

Acting Executive Director for Operations. 

[FR Doc. 2014–29664 Filed 12–18–14; 8:45 am] 

BILLING CODE 7590–01–P 

FEDERAL DEPOSIT INSURANCE 

CORPORATION 

12 CFR Parts 339 and 391 

RIN 3064–AE03 

Loans in Areas Having Special Flood 

Hazards 

AGENCY: Federal Deposit Insurance 

Corporation (FDIC). 

ACTION: Final rule. 

SUMMARY: The Federal Deposit 

Insurance Corporation (‘‘FDIC’’) is 

adopting a final rule to rescind and 

remove regulations entitled ‘‘Loans in 

Areas Having Flood Hazards’’ and to 

amend regulations entitled ‘‘Loans in 

Areas Having Flood Hazards.’’ The final 

rule will integrate the flood insurance 

regulations for State nonmember banks 

and State savings associations in 

accordance with the requirements of the 

Dodd-Frank Wall Street Reform and 

Consumer Protection Act (the ‘‘DoddFrank Act’’). The integration of the 

regulations was originally proposed as 

part of an interagency joint notice of 

proposed rulemaking issued in October 

2013 pursuant to the Biggert-Waters 

Flood Insurance Reform Act of 2012 (the 

BW Act). The FDIC has decided to 

integrate the flood insurance regulations 

by means of an individual final rule. 

DATES: The final rule is effective on 

January 20, 2015. 

FOR FURTHER INFORMATION CONTACT: 

Mark Mellon, Counsel, Consumer 

Compliance Section (202) 898–3884, 

Legal Division; or John Jackwood, 

Senior Policy Analyst (202) 898–3991, 

Division of Depositor and Consumer 

Protection, Federal Deposit Insurance 

Corporation, 550 17th Street NW., 

Washington, DC 20429. 

SUPPLEMENTARY INFORMATION: 

I. Background 

A. The Dodd-Frank Act 

The Dodd-Frank Act 1 provided for a 

substantial reorganization of the 

regulation of State and Federal savings 

associations and their holding 

companies. Beginning July 21, 2011, the 

transfer date established by section 311 

of the Dodd-Frank Act, codified at 12 

U.S.C. 5411, (‘‘Transfer Date’’), the 

powers, duties, and functions formerly 

performed by the OTS were respectively 

divided among the FDIC, as to State 

savings associations, the Office of the 

Comptroller of the Currency (‘‘OCC’’), as 

to Federal savings associations, and the 

Board of Governors of the Federal 

Reserve System (‘‘FRB’’), as to savings 

and loan holding companies. Section 

316(b) of the Dodd-Frank Act, codified 

at 12 U.S.C. 5414(b), provides the 

manner of treatment for all orders, 

resolutions, determinations, regulations, 

and advisory materials that had been 

issued, made, prescribed, or allowed to 

become effective by the OTS. The 

section provides that if such materials 

were in effect on the day before the 

Transfer Date, they continue to be in 

effect and are enforceable by or against 

the appropriate successor agency until 

they are modified, terminated, set aside, 

or superseded in accordance with 

applicable law by such successor 

agency, by any court of competent 

jurisdiction, or by operation of law. 

Section 316(c) of the Dodd-Frank Act, 

codified at 12 U.S.C. 5414(c), further 

directed the FDIC and the OCC to 

consult with one another and to publish 

a list of the continued OTS regulations 

which would be enforced by the FDIC 

and the OCC, respectively. On June 14, 

2011, the FDIC’s Board of Directors 

approved a ‘‘List of OTS Regulations to 

be Enforced by the OCC and the FDIC 

Pursuant to the Dodd-Frank Wall Street 

Reform and Consumer Protection Act.’’ 

This list was published by the FDIC and 

the OCC as a Joint Notice in the Federal 

Register on July 6, 2011.2

Although section 312(b)(2)(B)(i)(II) of 

the Dodd-Frank Act, codified at 12 

U.S.C. 5412(b)(2)(B)(i)(II), granted the 

OCC rulemaking authority relating to 

both State and Federal savings 

associations, the Dodd-Frank Act did 

not affect the FDIC’s existing authority 

to issue regulations under the Federal 

Deposit Insurance Act (‘‘FDI Act’’) and 

other laws as the ‘‘appropriate Federal 

banking agency’’ or under similar 

statutory terminology. Section 312(c) of 

the Dodd-Frank Act amended the 

definition of ‘‘appropriate Federal 

banking agency’’ contained in section 

3(q) of the FDI Act, 12 U.S.C. 1813(q), 

to add State savings associations to the 

list of entities for which the FDIC is 

designated as the ‘‘appropriate Federal 


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Federal Register / Vol. 79, No. 244 / Friday, December 19, 2014 / Rules and Regulations 75743 

3 76 FR 47652 (Aug. 5, 2011). 

4Public Law 112–141, 126 Stat. 916 (2012). 

5 78 FR 65108. 6Pub. L. 104–208, 110 Stat. 3009 (Sept. 30, 1996). 

banking agency.’’ As a result, when the 

FDIC acts as the designated 

‘‘appropriate Federal banking agency,’’ 

or under similar terminology, for State 

savings associations, as it does here, the 

FDIC is authorized to issue, modify and 

rescind regulations involving such 

associations, as well as for State 

nonmember banks and insured branches 

of foreign banks. 

Pursuant to this authority, the FDIC’s 

Board of Directors reissued and redesignated certain transferring 

regulations of the former OTS on June 

14, 2011, as noted earlier. These 

transferred OTS regulations were 

published as new FDIC regulations in 

the Federal Register on August 5, 2011.3

When it republished the transferred 

OTS regulations as new FDIC 

regulations, the FDIC specifically noted 

that its staff would evaluate the 

transferred OTS rules and might later 

recommend incorporating the 

transferred OTS regulations into other 

FDIC rules, amending them, or 

rescinding them, as appropriate. 

B. The BW Act 

The BW Act,4 signed into law by the 

President on July 6, 2012, significantly 

revised Federal flood insurance statutes. 

Pursuant to the BW Act, the FDIC along 

with the OCC, the FRB, the Farm Credit 

Administration, and the National Credit 

Union Administration published a 

Notice of Proposed Rulemaking on 

October 30, 2013 (the ‘‘NPR’’).5 Among 

other topics, the NPR discussed the OCC 

and FDIC’s proposals to integrate their 

flood insurance regulations for national 

banks and Federal savings associations 

and for State non-member banks and 

State savings associations, respectively, 

pursuant to the previously discussed 

requirements of the Dodd-Frank Act. 

Specifically, the OCC proposed to add 

language to its flood insurance 

regulation for national banks, 12 CFR 

part 22, to make it applicable to both 

national banks and Federal savings 

associations, and to remove its flood 

insurance regulation for Federal savings 

associations, 12 CFR part 172. Similarly, 

the FDIC proposed to add language to 12 

CFR part 339, its flood regulation for 

State nonmember banks, to make it 

applicable to both State nonmember 

banks and State savings associations 

and to remove its flood insurance 

regulation for State savings associations, 

12 CFR part 391 subpart D. The NPR 

noted that Parts 22, 172, 339, and 391 

subpart D, are nearly identical and 

contain no substantive differences, as 

they were originally adopted through an 

interagency rulemaking process. 

II. Comments 

The NPR had a sixty-day comment 

period, which closed on December 29, 

2013. No comments were received on 

the FDIC’s proposed integration of its 

flood insurance rules. Consequently this 

final rule pertaining solely to the 

integration of FDIC and OTS flood 

insurance rules is adopted basically as 

proposed in the interagency NPR. 

III. Explanation of the Final Rule 

As discussed in the NPR, part 391, 

subpart D is almost identical to part 339, 

and the designation of part 339 as the 

single regulation for depository 

institutions supervised by the FDIC will 

serve to streamline the FDIC’s rules and 

eliminate unnecessary regulations. To 

that effect, the final rule removes and 

rescinds 12 CFR part 391, subpart D in 

its entirety. 

Consistent with the NPR, the final 

rule also amends part 339 by deleting 

the definition of ‘‘bank,’’ inserting a 

definition of ‘‘FDIC-supervised 

institution’’ that includes both nonmember banks and State savings 

associations, and replacing the term 

‘‘bank’’ with the term ‘‘FDIC-supervised 

institution’’ throughout the rule. The 

amendments make it plain that the rule 

applies to both non-member banks and 

State savings associations. 

IV. Administrative Law Matters 

A. Paperwork Reduction Act 

Pursuant to the NPR, the FDIC will 

rescind and remove from its regulations 

12 CFR part 391, subpart D. This rule 

was transferred with only nominal 

changes to the FDIC from the OTS when 

the OTS was abolished by Title III of the 

Dodd-Frank Act. Part 391, subpart D is 

redundant and duplicative of the FDIC’s 

rule at part 339 regarding loans in areas 

having special flood hazards. Removing 

part 391, subpart D and adding a 

definition of FDIC-supervised institution 

to part 339 will not involve any new 

collections of information pursuant to 

the Paperwork Reduction Act (44 U.S.C. 

3501 et seq.). Consequently, no 

information collection has been 

submitted to the Office of Management 

and Budget for review. 

B. The Regulatory Flexibility Act 

The Regulatory Flexibility Act, 5 

U.S.C. 601, et seq. (RFA), requires that 

each federal agency either (1) certify 

that a proposed rule would not, if 

adopted in final form, have a significant 

economic impact on a substantial 

number of small entities, or (2) prepare 

an initial regulatory flexibility analysis 

of the rule and publish the analysis for 

comment. The proposal to integrate the 

FDIC’s flood insurance regulations 

makes no substantive changes to the 

requirements set forth pursuant to that 

rule. It instead would only merge two 

nearly identical regulations, thus 

reducing redundancy and the potential 

for confusion as to which regulation 

applies. On this basis, the FDIC certifies 

that the present rule revision will not 

have a significant impact on a 

substantial number of small entities, 

within the meaning of those terms as 

used in the RFA. 

C. The Economic Growth and 

Regulatory Paperwork Reduction Act 

Under section 2222 of the Economic 

Growth and Regulatory Paperwork 

Reduction Act of 1996 (‘‘EGRPRA’’), the 

FDIC is required to review all of its 

regulations, at least once every 10 years, 

in order to identify any outdated or 

otherwise unnecessary regulations 

imposed on insured depository 

institutions.6 The FDIC completed the 

last comprehensive review of its 

regulations under EGRPRA in 2006 and 

is commencing the next decennial 

review, which is expected to be 

completed by 2016. The NPR solicited 

comments on the proposed rescission of 

part 391, subpart D and amendments to 

part 339. No comments on this issue 

were received. Upon review, the FDIC 

does not believe that part 339, as 

amended by the Final Rule, imposes any 

outdated or unnecessary regulatory 

requirements on any insured depository 

institutions. 

D. Plain Language 

Section 722 of the Gramm-LeachBliley Act, 12 U.S.C. 4809, requires each 

Federal banking agency to use plain 

language in all of its proposed and final 

rules published after January 1, 2000. 

Although the FDIC did not receive any 

comments, the FDIC sought to present 

the final rule in a simple and 

straightforward manner. 

List of Subjects 

12 CFR Part 339 

Flood insurance, Reporting and 

recordkeeping requirements, Savings 

associations. 

12 CFR Part 391 

Savings associations. 

Authority and Issuance 

For the reasons set forth in the 

Supplementary Information, the Federal 

Deposit Insurance Corporation amends 

Parts 339 and 391 of Chapter III of Title 


tkelley on DSK3SPTVN1PROD with RULES
75744 Federal Register / Vol. 79, No. 244 / Friday, December 19, 2014 / Rules and Regulations 

12, Code of Federal Regulations as 

follows: 

■ 1. Part 339 is revised to read as 

follows: 

PART 339—LOANS IN AREAS HAVING 

SPECIAL FLOOD HAZARDS 

Sec. 

339.1 Authority, purpose, and scope. 

339.2 Definitions. 

339.3 Requirement to purchase flood 

insurance where available. 

339.4 Exemptions. 

339.5 Escrow requirement. 

339.6 Required use of standard flood hazard 

determination form. 

339.7 Forced placement of flood insurance. 

339.8 Determination fees. 

339.9 Notice of special flood hazards and 

availability of federal disaster relief 

assistance. 

339.10 Notice of servicer’s identity. 

Appendix A to Part 339—Sample Form of 

Notice of Special Flood Hazards and 

Availability of Federal Disaster Relief 

Assistance 

Authority: 12 U.S.C. 1462, 1462a, 1463, 

1464, 1819 (Tenth), 5412(b)(2)(C) and 42 

U.S.C. 4012a, 4104a, 4104b, 4106, and 4128. 

§ 339.1 Authority, purpose, and scope. 

(a) Authority. This part is issued 

pursuant to 12 U.S.C. 1462, 1462a, 1463, 

1464, 1819 (Tenth), 5412(b)(2)(C) and 42 

U.S.C. 4012a, 4104a, 4104b, 4106, and 

4128. 

(b) Purpose. The purpose of this part 

is to implement the requirements of the 

National Flood Insurance Act of 1968 

and the Flood Disaster Protection Act of 

1973, as amended (42 U.S.C. 4001– 

4129). 

(c) Scope. This part, except for 

§§ 339.6 and 339.8, applies to loans 

secured by buildings or mobile homes 

located or to be located in areas 

determined by the Director of the 

Federal Emergency Management Agency 

to have special flood hazards. Sections 

339.6 and 339.8 apply to loans secured 

by buildings or mobile homes, 

regardless of location. 

§ 339.2 Definitions. 

(a) Act means the National Flood 

Insurance Act of 1968, as amended (42 

U.S.C. 4001–4129). 

(b) Building means a walled and 

roofed structure, other than a gas or 

liquid storage tank, that is principally 

above ground and affixed to a 

permanent site, and a walled and roofed 

structure while in the course of 

construction, alteration, or repair. 

(c) Community means a state or a 

political subdivision of a State that has 

zoning and building code jurisdiction 

over a particular area having special 

flood hazards. 

(d) Designated loan means a loan 

secured by a building or mobile home 

that is located or to be located in a 

special flood hazard area in which flood 

insurance is available under the Act. 

(e) Director of FEMA means the 

Director of the Federal Emergency 

Management Agency. 

(f) FDIC-supervised institution means 

any insured depository institution for 

which the Federal Deposit Insurance 

Corporation is the appropriate Federal 

banking agency pursuant to section 3(g) 

of the Federal Deposit Insurance Act, 12 

U.S.C. 1813(g). 

(g) Mobile home means a structure, 

transportable in one or more sections, 

that is built on a permanent chassis and 

designed for use with or without a 

permanent foundation when attached to 

the required utilities. The term mobile 

home does not include a recreational 

vehicle. For purposes of this part, the 

term mobile home means a mobile home 

on a permanent foundation. The term 

mobile home includes a manufactured 

home as that term is used in the NFIP. 

(h) NFIP means the National Flood 

Insurance Program authorized under the 

Act. 

(i) Residential improved real estate 

means real estate upon which a home or 

other residential building is located or 

to be located. 

(j) Servicer means the person 

responsible for: 

(1) Receiving any scheduled, periodic 

payments from a borrower under the 

terms of a loan, including amounts for 

taxes, insurance premiums, and other 

charges with respect to the property 

securing the loan; and 

(2) Making payments of principal and 

interest and any other payments from 

the amounts received from the borrower 

as may be required under the terms of 

the loan. 

(k) Special flood hazard area means 

the land in the flood plain within a 

community having at least a one percent 

chance of flooding in any given year, as 

designated by the Director of FEMA. 

(l) Table funding means a settlement 

at which a loan is funded by a 

contemporaneous advance of loan funds 

and an assignment of the loan to the 

person advancing the funds. 

§ 339.3 Requirement to purchase flood 

insurance where available. 

(a) In general. An FDIC-supervised 

institution shall not make, increase, 

extend, or renew any designated loan 

unless the building or mobile home and 

any personal property securing the loan 

is covered by flood insurance for the 

term of the loan. The amount of 

insurance must be at least equal to the 

lesser of the outstanding principal 

balance of the designated loan or the 

maximum limit of coverage available for 

the particular type of property under the 

Act. Flood insurance coverage under the 

Act is limited to the overall value of the 

property securing the designated loan 

minus the value of the land on which 

the property is located. 

(b) Table funded loans. An FDICsupervised institution that acquires a 

loan from a mortgage broker or other 

entity through table funding shall be 

considered to be making a loan for the 

purpose of this part. 

§ 339.4 Exemptions. 

The flood insurance requirement 

prescribed by § 339.3 does not apply 

with respect to: 

(a) Any state-owned property covered 

under a policy of self-insurance 

satisfactory to the Director of FEMA, 

who publishes and periodically revises 

the list of states falling within this 

exemption; or 

(b) Property securing any loan with an 

original principal balance of $5,000 or 

less and a repayment term of one year 

or less. 

§ 339.5 Escrow requirement. 

If an FDIC-supervised institution 

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 FDICsupervised institution shall also require 

the escrow of all premiums and fees for 

any flood insurance required under 

§ 339.3. The FDIC-supervised 

institution, or a servicer acting on behalf 

of the FDIC-supervised institution, shall 

deposit the flood insurance premiums 

on behalf of the borrower in an escrow 

account. This escrow account will be 

subject to escrow requirements adopted 

pursuant to section 10 of the Real Estate 

Settlement Procedures Act of 1974 (12 

U.S.C. 2609) (RESPA), which generally 

limits the amount that may be 

maintained in escrow accounts for 

certain types of loans and requires 

escrow account statements for those 

accounts, only if the loan is otherwise 

subject to RESPA. Following receipt of 

a notice from the Director of FEMA or 

other provider of flood insurance that 

premiums are due, the FDIC-supervised 

institution, or a servicer acting on behalf 

of the FDIC-supervised institution, shall 

pay the amount owed to the insurance 

provider from the escrow account by the 

date when such premiums are due. 

§ 339.6 Required use of standard flood 

hazard determination form. 

(a) Use of form. An FDIC-supervised 

institution shall use the standard flood 

hazard determination form developed 


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Federal Register / Vol. 79, No. 244 / Friday, December 19, 2014 / Rules and Regulations 75745 

by the Director of FEMA when 

determining whether the building or 

mobile home offered as collateral 

security for a loan is or will be located 

in a special flood hazard area in which 

flood insurance is available under the 

Act. The standard flood hazard 

determination form may be used in a 

printed, computerized, or electronic 

manner. An FDIC-supervised institution 

may obtain the standard flood hazard 

determination form by written request 

to FEMA, P.O. Box 2012, Jessup, MD 

20794–2012. 

(b) Retention of form. An FDICsupervised institution shall retain a 

copy of the completed standard flood 

hazard determination form, in either 

hard copy or electronic form, for the 

period of time the FDIC-supervised 

institution owns the loan. 

§ 339.7 Forced placement of flood 

insurance. 

If an FDIC-supervised institution, or a 

servicer acting on behalf of the FDICsupervised institution, 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. 

§ 339.8 Determination fees. 

(a) General. Notwithstanding any 

federal or state law other than the Flood 

Disaster Protection Act of 1973, as 

amended (42 U.S.C. 4001—4129), any 

FDIC-supervised institution, or a 

servicer acting on behalf of the FDICsupervised institution, may charge a 

reasonable fee for determining whether 

the building or mobile home securing 

the loan is located or will be located in 

a special flood hazard area. A 

determination fee may also include, but 

is not limited to, a fee for life-of-loan 

monitoring. 

(b) Borrower fee. The determination 

fee authorized by paragraph (a) of this 

section may be charged to the borrower 

if the determination: 

(1) Is made in connection with a 

making, increasing, extending, or 

renewing of the loan that is initiated by 

the borrower; 

(2) Reflects the Director of FEMA’s 

revision or updating of floodplain areas 

or flood-risk zones; 

(3) Reflects the Director of FEMA’s 

publication of a notice or compendium 

that: 

(i) Affects the area in which the 

building or mobile home securing the 

loan is located; or 

(ii) By determination of the Director of 

FEMA, may reasonably require a 

determination whether the building or 

mobile home securing the loan is 

located in a special flood hazard area; or 

(4) Results in the purchase of flood 

insurance coverage by the lender or its 

servicer on behalf of the borrower under 

§ 339.7. 

(c) Purchaser or transferee fee. The 

determination fee authorized by 

paragraph (a) of this section may be 

charged to the purchaser or transferee of 

a loan in the case of the sale or transfer 

of the loan. 

§ 339.9 Notice of special flood hazards and 

availability of federal disaster relief 

assistance. 

(a) Notice requirement. When an 

FDIC-supervised institution makes, 

increases, extends, or renews a loan 

secured by a building or a mobile home 

located or to be located in a special 

flood hazard area, the FDIC-supervised 

institution shall mail or deliver a 

written notice to the borrower and to the 

servicer in all cases whether or not flood 

insurance is available under the Act for 

the collateral securing the loan. 

(b) Contents of notice. The written 

notice must include the following 

information: 

(1) A warning, in a form approved by 

the Director of FEMA, that the building 

or the mobile home is or will be located 

in a special flood hazard area; 

(2) A description of the flood 

insurance purchase requirements set 

forth in section 102(b) of the Flood 

Disaster Protection Act of 1973, as 

amended (42 U.S.C. 4012a(b)); 

(3) A statement, where applicable, 

that flood insurance coverage is 

available under the NFIP and may also 

be available from private insurers; and 

(4) A statement whether federal 

disaster relief assistance may be 

available in the event of damage to the 

building or mobile home caused by 

flooding in a federally-declared disaster. 

(c) Timing of notice. The FDICsupervised institution shall provide the 

notice required by paragraph (a) of this 

section to the borrower within a 

reasonable time before the completion 

of the transaction, and to the servicer as 

promptly as practicable after the FDICsupervised institution provides notice to 

the borrower and in any event no later 

than the time the FDIC-supervised 

institution provides other similar 

notices to the servicer concerning 

hazard insurance and taxes. Notice to 

the servicer may be made electronically 

or may take the form of a copy of the 

notice to the borrower. 

(d) Record of receipt. The FDICsupervised institution shall retain a 

record of the receipt of the notices by 

the borrower and the servicer for the 

period of time the FDIC-supervised 

institution owns the loan. 

(e) Alternate method of notice. Instead 

of providing the notice to the borrower 

required by paragraph (a) of this section, 

an FDIC-supervised institution may 

obtain satisfactory written assurance 

from a seller or lessor that, within a 

reasonable time before the completion 

of the sale or lease transaction, the seller 

or lessor has provided such notice to the 

purchaser or lessee. The FDICsupervised institution shall retain a 

record of the written assurance from the 

seller or lessor for the period of time the 

FDIC-supervised institution owns the 

loan. 

(f) Use of prescribed form of notice. 

An FDIC-supervised institution will be 

considered to be in compliance with the 

requirement for notice to the borrower 

of this section by providing written 

notice to the borrower containing the 

language presented in appendix A to 

this part within a reasonable time before 

the completion of the transaction. The 

notice presented in appendix A to this 

part satisfies the borrower notice 

requirements of the Act. 

§ 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 FDICsupervised institution shall notify the 

Director of FEMA (or the Director of 

FEMA’s designee) in writing of the 

identity of the servicer of the loan. The 

Director of FEMA has designated the 

insurance provider to receive the FDICsupervised institution’s notice of the 

servicer’s identity. This notice may be 

provided electronically if electronic 

transmission is satisfactory to the 

Director of FEMA’s designee. 

(b) Transfer of servicing rights. The 

FDIC-supervised institution shall notify 

the Director of FEMA (or the Director of 

FEMA’s designee) of any change in the 


tkelley on DSK3SPTVN1PROD with RULES
75746 Federal Register / Vol. 79, No. 244 / Friday, December 19, 2014 / Rules and Regulations 

1As part of the 2013 regulatory review process, 

NCUA also reviewed parts 711, 712, 713, 714, 715, 

716, 717, 721, 723, 724, 725, 740, 741, 745, and 747 

of NCUA’s regulations. 

2For purposes of this rulemaking, these agencies 

are the Board of Governors of the Federal Reserve 

System, Federal Deposit Insurance Corporation, and 

Office of the Comptroller of Currency. 

servicer of a loan described in paragraph 

(a) of this section within 60 days after 

the effective date of the change. This 

notice may be provided electronically if 

electronic transmission is satisfactory to 

the Director of FEMA’s designee. Upon 

any change in the servicing of a loan 

described in paragraph (a) of this 

section, the duty to provide notice 

under this paragraph (b) shall transfer to 

the transferee servicer. 

Appendix A to Part 339—Sample Form 

of Notice of Special Flood Hazards and 

Availability of Federal Disaster Relief 

Assistance 

We are giving you this notice to inform you 

that: 

The building or mobile home securing the 

loan for which you have applied is or will 

be located in an area with special flood 

hazards. 

The area has been identified by the 

Director of the Federal Emergency 

Management Agency (FEMA) as a special 

flood hazard area using FEMA’s Flood 

Insurance Rate Map or the Flood Hazard 

Boundary Map for the following community: 

llll. This area has at least a one percent 

(1%) chance of a flood equal to or exceeding 

the base flood elevation (a 100-year flood) in 

any given year. During the life of a 30-year 

mortgage loan, the risk of a 100-year flood in 

a special flood hazard area is 26 percent 

(26%). 

Federal law allows a lender and borrower 

jointly to request the Director of FEMA to 

review the determination of whether the 

property securing the loan is located in a 

special flood hazard area. If you would like 

to make such a request, please contact us for 

further information. llllllllll

The community in which the property 

securing the loan is located participates in 

the National Flood Insurance Program 

(NFIP). Federal law will not allow us to make 

you the loan that you have applied for if you 

do not purchase flood insurance. The flood 

insurance must be maintained for the life of 

the loan. If you fail to purchase or renew 

flood insurance on the property, federal law 

authorizes and requires us to purchase the 

flood insurance for you at your expense. 

• Flood insurance coverage under the 

NFIP may be purchased through an insurance 

agent who will obtain the policy either 

directly through the NFIP or through an 

insurance company that participates in the 

NFIP. Flood insurance also may be available 

from private insurers that do not participate 

in the NFIP. 

• At a minimum, flood insurance 

purchased must cover the lesser of: 

(1) The outstanding principal balance of 

the loan; or 

(2) the maximum amount of coverage 

allowed for the type of property under the 

NFIP. Flood insurance coverage under the 

NFIP is limited to the overall value of the 

property securing the loan minus the value 

of the land on which the property is located. 

• Federal disaster relief assistance (usually 

in the form of a low-interest loan) may be 

available for damages incurred in excess of 

your flood insurance if your community’s 

participation in the NFIP is in accordance 

with NFIP requirements. 

llllllllllFlood insurance 

coverage under the NFIP is not available for 

the property securing the loan because the 

community in which the property is located 

does not participate in the NFIP. In addition, 

if the non-participating community has been 

identified for at least one year as containing 

a special flood hazard area, properties 

located in the community will not be eligible 

for federal disaster relief assistance in the 

event of a federally-declared flood disaster. 

PART 391—FORMER OFFICE OF 

THRIFT SUPERVISION REGULATIONS 

■ 2. The authority citation for Part 391 

is revised to read as follows: 

Authority: 12 U.S.C. 1819. 

Subpart A also issued under 12 U.S.C. 

1462a; 1463; 1464; 1828; 1831p-1; 1881– 

1884; 15 U.S.C. 1681w; 15 U.S.C. 6801; 6805. 

Subpart B also issued under 12 U.S.C. 

1462a; 1463; 1464; 1828; 1831p-1; 1881– 

1884; 15 U.S.C.1681w; 15 U.S.C. 6801; 6805. 

Subpart C also issued under 12 U.S.C. 

1462a; 1463; 1464; 1828; 1831p-1; and 1881– 

1884; 15 U.S.C. 1681m; 1681w. 

Subpart E also issued under 12 U.S.C. 

1467a; 1468; 1817; 1831i. 

Subpart D—[Removed and Reserved] 

■ 3. Remove and reserve Subpart D 

consisting of §§ 391.30 through 391.39 

and the Appendix to Subpart D. 

Dated at Washington, DC, this 16th day of 

December 2014. 

By Order of the Board of Directors, Federal 

Deposit Insurance Corporation. 

Robert E. Feldman, 

Executive Secretary. 

[FR Doc. 2014–29761 Filed 12–18–14; 8:45 am] 

BILLING CODE P 

NATIONAL CREDIT UNION 

ADMINISTRATION 

12 CFR Parts 701 and 722 

RIN 3133–AE36 

Appraisals—Availability to Applicants 

and Requirements for Transactions 

Involving an Existing Extension of 

Credit 

AGENCY: National Credit Union 

Administration (NCUA). 

ACTION: Final rule. 

SUMMARY: As part of NCUA’s Regulatory 

Modernization Initiative, the NCUA 

Board (Board) is revising two of NCUA’s 

regulations regarding appraisals. In 

response to a recent amendment to the 

Consumer Financial Protection Bureau’s 

(CFPB) Regulation B, the Board is 

eliminating from NCUA’s regulations 

the now duplicative requirement that 

federal credit unions (FCUs) make 

available, to any requesting member, a 

copy of the appraisal used in connection 

with that member’s application for a 

loan secured by a first lien on a 

dwelling. Also, the Board is amending 

NCUA’s appraisal regulations by 

expanding the current exemption for 

certain transactions involving an 

existing extension of credit. More 

specifically, under the expanded 

exemption, a federally insured credit 

union (FICU) will be permitted to 

refinance or modify a real estate-related 

loan held by the FICU, without having 

to obtain another appraisal, if there is no 

advancement of new monies or if there 

is adequate collateral protection even 

with the advancement of new monies. 

Lastly, the Board is making a minor 

technical amendment to the definition 

of the term ‘‘application.’’ 

DATES: This rule is effective January 20, 

2015. 

FOR FURTHER INFORMATION CONTACT: 

Pamela Yu, Senior Staff Attorney, Office 

of General Counsel, National Credit 

Union Administration, 1775 Duke 

Street, Alexandria, Virginia 22314–3428 

or telephone (703) 518–6593. 

SUPPLEMENTARY INFORMATION: 

I. Background and Proposal 

II. Final Rule 

III. Regulatory Procedures 

I. Background and Proposal 

A. Background 

Each year, NCUA reviews one-third of 

its regulations for substance and to 

ensure they are clear, current, and 

appropriate in scope. NCUA notifies the 

public of those regulations under review 

so that the public may have an 

opportunity to provide comments on 

those regulations. 

In 2013, NCUA reviewed part 722, 

along with several other parts of 

NCUA’s regulations.1 Part 722 sets forth 

the appraisal requirements for federallyrelated transactions involving real 

estate. The appraisal requirements in 

part 722 are generally equivalent to the 

appraisal requirements of the other 

federal financial regulatory agencies.2

However, NCUA received numerous 

comments during the public comment 

period requesting a specific change to 

§ 722.3(a)(5) to better align NCUA’s 

appraisal requirements with those of the 


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