H. R. 3474—94
‘‘(5) exempt from the requirements of this subchapter any
class of transactions within any State if the Secretary deter-
mines that—
‘‘(A) under the laws of such State, that class of trans-
actions is subject to requirements substantially similar to
those imposed under this subchapter; and
‘‘(B) there is adequate provision for the enforcement
of such requirements; and’’.
(b) TECHNICAL
AND CONFORMING AMENDMENT.—The penul-
timate sentence of section 5318(a)(6) of title 31, United States
Code (as so redesignated by the amendment made by subsection
(a) of this section) is amended by inserting ‘‘under this paragraph
or paragraph (5)’’ after ‘‘exemption’’.
SEC. 411. CRIMINAL AND CIVIL PENALTIES FOR STRUCTURING DOMES-
TIC AND INTERNATIONAL TRANSACTIONS.
(a) CRIMINAL PENALTY.—Section 5324 of title 31, United States
Code, is amended by adding at the end the following new subsection:
‘‘(c) CRIMINAL PENALTY.—
‘‘(1) IN GENERAL.—Whoever violates this section shall be
fined in accordance with title 18, United States Code, impris-
oned for not more than 5 years, or both.
‘‘(2) ENHANCED PENALTY FOR AGGRAVATED CASES.—Whoever
violates this section while violating another law of the United
States or as part of a pattern of any illegal activity involving
more than $100,000 in a 12-month period shall be fined twice
the amount provided in subsection (b)(3) or (c)(3) (as the case
may be) of section 3571 of title 18, United States Code, impris-
oned for not more than 10 years, or both.’’.
(b) 
AMENDMENT
RELATING
TO
CIVIL
PENALTY.—Section
5321(a)(4)(A) of title 31, United States Code, is amended by striking
‘‘willfully’’.
(c) TECHNICAL AND CONFORMING AMENDMENTS.—
(1) Subsections (a) and (b) of section 5322 of title 31,
United States Code, are amended by inserting ‘‘or 5324’’ after
‘‘section 5315’’ each place such term appears.
(2) The following sections are each amended by striking
‘‘section 5322 of title 31’’ and inserting ‘‘section 5322 or 5324
of title 31’’ each place such term appears in such sections:
(A) Sections 8(g)(1)(A)(ii), 8(w)(1)(B), and 11(c)(5)(M)
of the Federal Deposit Insurance Act.
(B) Sections 131(a)(2), 206(h)(1)(C), 206(i)(1)(A)(ii), and
206(v)(1)(B) of the Federal Credit Union Act.
(C) Section 5239(d)(1)(B) of the Revised Statutes of
the United States (as redesignated by section 413(b)(2)
of this Act).
(D) Section 5(w)(1)(B) of the Home Owners’ Loan Act.
(E) Sections 984(a), 986(a), and 1956(g) (the first place
it appears) of title 18, United States Code.
SEC. 412. GAO STUDY OF CASHIERS’ CHECKS.
(a) STUDY REQUIRED.—The Comptroller General of the United
States shall conduct a study to—
(1) determine the extent to which the practice of issuing
of cashiers’ checks by financial institutions is vulnerable to
money laundering schemes;
H. R. 3474—95
(2) determine the extent to which additional recordkeeping
requirements should be imposed on financial institutions which
issue cashiers’ checks; and
(3) analyze such other factors relating to the use and regu-
lation of cashiers’ checks as the Comptroller General determines
to be appropriate.
(b) REPORT REQUIRED.—Before the end of the 6-month period
beginning on the date of enactment of this Act, the Comptroller
General shall submit a report to the Congress containing—
(1) the findings and conclusions of the Comptroller General
in connection with the study conducted pursuant to subsection
(a); and
(2) such recommendations for legislative and administrative
action as the Comptroller General may determine to be
appropriate.
SEC. 413. TECHNICAL AMENDMENTS AND CORRECTIONS.
(a) TITLE 31, U.S.C., AMENDMENTS.—
(1) Section 5321(a)(5)(A) of title 31, United States Code,
is amended by inserting ‘‘any violation of’’ after ‘‘causing’’.
(2) Section 5324(a) of title 31, United States Code, is
amended—
(A) by striking ‘‘section 5313(a), section 5325, or the
regulations issued thereunder or section 5325 or regula-
tions prescribed under such section 5325’’ each place such
term appears and inserting ‘‘section 5313(a) or 5325 or
any regulation prescribed under any such section’’; and
(B) by striking ‘‘with respect to such transaction’’.
(b) AMENDMENTS RELATING TO TITLE 31, U.S.C.—
(1) Effective as of the date of enactment of the Annunzio-
Wylie Anti-Money Laundering Act, section 1517(b) of such Act
is amended by striking ‘‘5314’’ and inserting ‘‘5318’’.
(2) Section 5239 of the Revised Statutes of the United
States is amended by redesignating the 2d subsection (c) (as
added by section 1502(a) of the Annunzio-Wylie Anti-Money
Laundering Act) as subsection (d).
(c) TITLE 18, U.S.C., AMENDMENTS.—
(1) Section 1956 of title 18, United States Code, is
amended—
(A) in subsection (a)(2)—
(i) by inserting ‘‘not more than’’ before ‘‘$500,000’’;
and
(ii) by striking ‘‘transfer.’’ each place such term
appears and inserting ‘‘transfer’’;
(B) in subsection (b)—
(i) by inserting ‘‘or (a)(3)’’ after ‘‘(a)(1)’’; and
(ii) by striking ‘‘transfer.’’ and inserting ‘‘transfer’’;
(C) in subsection (c)(7)(B)(iii), by inserting a close
parenthesis after ‘‘1978’’;
(D) in subsection (c)(7)(D), by striking ‘‘section 9(c)
of the Food Stamp Act of 1977’’ and inserting ‘‘section
15 of the Food Stamp Act of 1977’’;
(E) in subsection (c)(7)(E), by striking the period which
follows a period;
(F) in subsection (e), by striking ‘‘Evironmental’’ and
inserting ‘‘Environmental’’; and
H. R. 3474—96
(G) by redesignating subsection (g), the second place
it appears, as subsection (h).
(2) Section 1957(f)(1) of title 18, United States Code, is
amended by striking the comma which follows a comma.
(d) REPEAL OF OBSOLETE TECHNICAL CORRECTION TO SECTION
1956 OF TITLE 18, U.S.C.—Section 3557(2)(E) of Public Law 101–
647 is repealed, effective on the date of enactment of such Public
Law.
TITLE V—NATIONAL FLOOD INSURANCE
REFORM
SEC. 501. SHORT TITLE.
This title may be cited as the ‘‘National Flood Insurance Reform
Act of 1994’’.
Subtitle A—Definitions
SEC. 511. FLOOD DISASTER PROTECTION ACT OF 1973.
(a) IN GENERAL.—Section 3(a) of the Flood Disaster Protection
Act of 1973 (42 U.S.C. 4003(a)) is amended—
(1) by striking paragraph (5) and inserting the following
new paragraph:
‘‘(5) ‘Federal entity for lending regulation’ means the Board
of Governors of the Federal Reserve System, the Federal
Deposit Insurance Corporation, the Comptroller of the Cur-
rency, the Office of Thrift Supervision, the National Credit
Union Administration, and the Farm Credit Administration,
and with respect to a particular regulated lending institution
means the entity primarily responsible for the supervision of
the institution;’’;
(2) in paragraph (6), by striking the period at the end
and inserting a semicolon; and
(3) by inserting after paragraph (6) the following new para-
graphs:
‘‘(7) ‘Federal agency lender’ means a Federal agency that
makes direct loans secured by improved real estate or a mobile
home, to the extent such agency acts in such capacity;
‘‘(8) the term ‘improved real estate’ means real estate upon
which a building is located;
‘‘(9) ‘lender’ means a regulated lending institution or Fed-
eral agency lender;
‘‘(10) ‘regulated lending institution’ means any bank,
savings and loan association, credit union, farm credit bank,
Federal land bank association, production credit association,
or similar institution subject to the supervision of a Federal
entity for lending regulation; and
‘‘(11) ‘servicer’ means the person responsible for receiving
any scheduled periodic payments from a borrower pursuant
to the terms of a loan, including amounts for taxes, insurance
premiums, and other charges with respect to the property secur-
ing the loan, and making the payments of principal and interest
and such other payments with respect to the amounts received
from the borrower as may be required pursuant to the terms
of the loan.’’.
H. R. 3474—97
(b) CONFORMING AMENDMENT.—Section 202(b) of the Flood
Disaster Protection Act of 1973 (42 U.S.C. 4106(b)) is amended
by striking ‘‘Federal instrumentality described in such section shall
by regulation require the institutions’’ and inserting ‘‘Federal entity
for lending regulation shall by regulation require the regulated
lending institutions described in such section, and each Federal
agency lender shall issue regulations requiring the Federal agency
lender,’’.
SEC. 512. NATIONAL FLOOD INSURANCE ACT OF 1968.
(a) IN GENERAL.—Section 1370(a) of the National Flood Insur-
ance Act of 1968 (42 U.S.C. 4121(a)) is amended—
(1) in paragraph (5), by striking ‘‘and’’ at the end;
(2) in paragraph (6), by striking the period at the end
and inserting a semicolon; and
(3) by inserting after paragraph (6) the following new
paragraphs:
‘‘(7) the term ‘repetitive loss structure’ means a structure
covered by a contract for flood insurance under this title that
has incurred flood-related damage on 2 occasions during a
10-year period ending on the date of the event for which a
second claim is made, in which the cost of repair, on the
average, equaled or exceeded 25 percent of the value of the
structure at the time of each such flood event;
‘‘(8) the term ‘Federal agency lender’ means a Federal
agency that makes direct loans secured by improved real estate
or a mobile home, to the extent such agency acts in such
capacity;
‘‘(9) the term ‘Federal entity for lending regulation’ means
the Board of Governors of the Federal Reserve System, the
Federal Deposit Insurance Corporation, the Comptroller of the
Currency, the Office of Thrift Supervision, the National Credit
Union Administration, and the Farm Credit Administration,
and with respect to a particular regulated lending institution
means the entity primarily responsible for the supervision of
the institution;
‘‘(10) the term ‘improved real estate’ means real estate
upon which a building is located;
‘‘(11) the term ‘lender’ means a regulated lending institu-
tion or Federal agency lender;
‘‘(12) the term ‘natural and beneficial floodplain functions’
means—
‘‘(A) the functions associated with the natural or rel-
atively undisturbed floodplain that (i) moderate flooding,
retain flood waters, reduce erosion and sedimentation, and
mitigate the effect of waves and storm surge from storms,
and (ii) reduce flood related damage; and
‘‘(B) ancillary beneficial functions, including mainte-
nance of water quality and recharge of ground water, that
reduce flood related damage;
‘‘(13) the term ‘regulated lending institution’ means any
bank, savings and loan association, credit union, farm credit
bank, Federal land bank association, production credit associa-
tion, or similar institution subject to the supervision of a
Federal entity for lending regulation; and
‘‘(14) the term ‘servicer’ means the person responsible for
receiving any scheduled periodic payments from a borrower
H. R. 3474—98
pursuant to the terms of a loan, including amounts for taxes,
insurance premiums, and other charges with respect to the
property securing the loan, and making the payments of prin-
cipal and interest and such other payments with respect to
the amounts received from the borrower as may be required
pursuant to the terms of the loan.’’.
(b) CONFORMING AMENDMENT.—Section 1322(d) of the National
Flood Insurance Act of 1968 (42 U.S.C. 4029(d)) is amended by
striking ‘‘federally supervised, approved, regulated or insured finan-
cial institution’’ and inserting ‘‘regulated lending institution or
Federal agency lender’’.
Subtitle B—Compliance and Increased
Participation
SEC. 521. NONWAIVER OF FLOOD PURCHASE REQUIREMENT FOR
RECIPIENTS OF FEDERAL DISASTER ASSISTANCE.
Section 311(b) of the Robert T. Stafford Disaster Relief and
Emergency Assistance Act (42 U.S.C. 5154(b)) is amended by adding
at the end the following new sentence: ‘‘The requirements of this
subsection may not be waived under section 301.’’.
SEC. 522. EXPANDED FLOOD INSURANCE PURCHASE REQUIREMENTS.
(a) IN GENERAL.—Section 102(b) of the Flood Disaster Protec-
tion Act of 1973 (42 U.S.C. 4012a(b)) is amended to read as follows:
‘‘(b) REQUIREMENT FOR MORTGAGE LOANS.—
‘‘(1) REGULATED
LENDING
INSTITUTIONS.—Each Federal
entity for lending regulation (after consultation and coordina-
tion with the Financial Institutions Examination Council estab-
lished under the Federal Financial Institutions Examination
Council Act of 1974) shall by regulation direct regulated lending
institutions not to make, increase, extend, or renew any loan
secured by improved real estate or a mobile home located
or to be located in an area that has been identified by the
Director as an area having special flood hazards and in which
flood insurance has been made available under the National
Flood Insurance Act of 1968, unless the building or mobile
home and any personal property securing such loan is covered
for the term of the loan by flood insurance in an amount
at least equal to the outstanding principal balance of the loan
or the maximum limit of coverage made available under the
Act with respect to the particular type of property, whichever
is less.
‘‘(2) FEDERAL AGENCY LENDERS.—A Federal agency lender
may not make, increase, extend, or renew any loan secured
by improved real estate or a mobile home located or to be
located in an area that has been identified by the Director
as an area having special flood hazards and in which flood
insurance has been made available under the National Flood
Insurance Act of 1968, unless the building or mobile home
and any personal property securing such loan is covered for
the term of the loan by flood insurance in the amount provided
in paragraph (1). Each Federal agency lender shall issue any
regulations necessary to carry out this paragraph. Such regula-
tions shall be consistent with and substantially identical to
the regulations issued under paragraph (1).
H. R. 3474—99
‘‘(3) GOVERNMENT-SPONSORED ENTERPRISES FOR HOUSING.—
The Federal National Mortgage Association and the Federal
Home Loan Mortgage Corporation shall implement procedures
reasonably designed to ensure that, for any loan that is—
‘‘(A) secured by improved real estate or a mobile home
located in an area that has been identified, at the time
of the origination of the loan or at any time during the
term of the loan, by the Director as an area having special
flood hazards and in which flood insurance is available
under the National Flood Insurance Act of 1968, and
‘‘(B) purchased by such entity,
the building or mobile home and any personal property securing
the loan is covered for the term of the loan by flood insurance
in the amount provided in paragraph (1).
‘‘(4) APPLICABILITY.—
‘‘(A) EXISTING
COVERAGE.—Except as provided in
subparagraph (B), paragraph (1) shall apply on the date
of enactment of the Riegle Community Development and
Regulatory Improvement Act of 1994.
‘‘(B) NEW
COVERAGE.—Paragraphs (2) and (3) shall
apply only with respect to any loan made, increased,
extended, or renewed after the expiration of the 1-year
period beginning on the date of enactment of the Riegle
Community Development and Regulatory Improvement Act
of 1994. Paragraph (1) shall apply with respect to any
loan made, increased, extended, or renewed by any lender
supervised by the Farm Credit Administration only after
the expiration of the period under this subparagraph.
‘‘(C) CONTINUED
EFFECT
OF
REGULATIONS.—Notwith-
standing any other provision of this subsection, the regula-
tions to carry out paragraph (1), as in effect immediately
before the date of enactment of the Riegle Community
Development and Regulatory Improvement Act of 1994,
shall continue to apply until the regulations issued to carry
out paragraph (1) as amended by section 522(a) of such
Act take effect.’’.
(b) EXEMPTION FOR SMALL LOANS.—Section 102(c) of the Flood
Disaster Protection Act of 1973 (42 U.S.C. 4012a(c)) is amended—
(1) by striking ‘‘(c) Notwithstanding’’ and inserting the
following:
‘‘(c) EXCEPTIONS TO PURCHASE REQUIREMENTS.—
‘‘(1) STATE-OWNED PROPERTY.—Notwithstanding’’; and
(2) by adding at the end the following new paragraph:
‘‘(2) SMALL LOANS.—Notwithstanding any other provision
of this section, subsections (a) and (b) shall not apply to any
loan having—
‘‘(A) an original outstanding principal balance of $5,000
or less; and
‘‘(B) a repayment term of 1 year or less.’’.
SEC. 523. ESCROW OF FLOOD INSURANCE PAYMENTS.
Section 102 of the Flood Disaster Protection Act of 1973 (42
U.S.C. 4012a) is amended by adding at the end the following new
subsection:
‘‘(d) ESCROW OF FLOOD INSURANCE PAYMENTS.—
‘‘(1) REGULATED
LENDING
INSTITUTIONS.—Each Federal
entity for lending regulation (after consultation and coordina-
H. R. 3474—100
tion with the Financial Institutions Examination Council) shall
by regulation require that, if a regulated lending institution
requires the escrowing of taxes, insurance premiums, fees, or
any other charges for a loan secured by residential improved
real estate or a mobile home, then all premiums and fees
for flood insurance under the National Flood Insurance Act
of 1968 for the real estate or mobile home shall be paid to
the regulated lending institution or other servicer for the loan
in a manner sufficient to make payments as due for the dura-
tion of the loan. Upon receipt of the premiums, the regulated
lending institution or servicer of the loan shall deposit the
premiums in an escrow account on behalf of the borrower.
Upon receipt of a notice from the Director or the provider
of the insurance that insurance premiums are due, the regu-
lated lending institution or servicer shall pay from the escrow
account to the provider of the insurance the amount of insur-
ance premiums owed.
‘‘(2) FEDERAL
AGENCY
LENDERS.—Each Federal agency
lender shall by regulation require and provide for escrow and
payment of any flood insurance premiums and fees relating
to residential improved real estate and mobile homes securing
loans made by the Federal agency lender under the cir-
cumstances and in the manner provided under paragraph (1).
Any regulations issued under this paragraph shall be consistent
with and substantially identical to the regulations issued under
paragraph (1).
‘‘(3) APPLICABILITY OF RESPA.—Escrow accounts established
pursuant to this subsection shall be subject to the provisions
of section 10 of the Real Estate Settlement Procedures Act
of 1974.
‘‘(4) DEFINITION.—For purposes of this subsection, the term
‘residential improved real estate’ means improved real estate
for which the improvement is a residential building.
‘‘(5) APPLICABILITY.—This subsection shall apply only with
respect to any loan made, increased, extended, or renewed
after the expiration of the 1-year period beginning on the date
of enactment of the Riegle Community Development and Regu-
latory Improvement Act of 1994.’’.
SEC. 524. PLACEMENT OF FLOOD INSURANCE BY LENDERS.
Section 102 of the Flood Disaster Protection Act of 1973 (42
U.S.C. 4012a), as amended by the preceding provisions of this
title, is further amended by adding at the end the following new
subsection:
‘‘(e) PLACEMENT OF FLOOD INSURANCE BY LENDER.—
‘‘(1) NOTIFICATION TO BORROWER OF LACK OF COVERAGE.—
If, at the time of origination or at any time during the term
of a loan secured by improved real estate or by a mobile
home located in an area that has been identified by the Director
(at the time of the origination of the loan or at any time
during the term of the loan) as an area having special flood
hazards and in which flood insurance is available under the
National Flood Insurance Act of 1968, the lender or servicer
for the loan determines that the building or mobile home and
any personal property securing the loan is not covered by
flood insurance or is covered by such insurance in an amount
less than the amount required for the property pursuant to
H. R. 3474—101
paragraph (1), (2), or (3) of subsection (b), the lender or servicer
shall notify the borrower under the loan that the borrower
should obtain, at the borrower’s expense, an amount of flood
insurance for the building or mobile home and such personal
property that is not less than the amount under subsection
(b)(1), for the term of the loan.
‘‘(2) PURCHASE OF COVERAGE ON BEHALF OF BORROWER.—
If the borrower fails to purchase such flood insurance within
45 days after notification under paragraph (1), the lender or
servicer for the loan shall purchase the insurance on behalf
of the borrower and may charge the borrower for the cost
of premiums and fees incurred by the lender or servicer for
the loan in purchasing the insurance.
‘‘(3) REVIEW
OF
DETERMINATION
REGARDING
REQUIRED
PURCHASE.—
‘‘(A) IN GENERAL.—The borrower and lender for a loan
secured by improved real estate or a mobile home may
jointly request the Director to review a determination of
whether the building or mobile home is located in an area
having special flood hazards. Such request shall be sup-
ported by technical information relating to the improved
real estate or mobile home. Not later than 45 days after
the Director receives the request, the Director shall review
the determination and provide to the borrower and the
lender with a letter stating whether or not the building
or mobile home is in an area having special flood hazards.
The determination of the Director shall be final.
‘‘(B) EFFECT OF DETERMINATION.—Any person to whom
a borrower provides a letter issued by the Director pursuant
to subparagraph (A), stating that the building or mobile
home securing the loan of the borrower is not in an area
having special flood hazards, shall have no obligation under
this title to require the purchase of flood insurance for
such building or mobile home during the period determined
by the Director, which shall be specified in the letter and
shall begin on the date on which such letter is provided.
‘‘(C) EFFECT OF FAILURE TO RESPOND.—If a request
under subparagraph (A) is made in connection with the
origination of a loan and the Director fails to provide a
letter under subparagraph (A) before the later of (i) the
expiration of the 45-day period under such subparagraph,
or (ii) the closing of the loan, no person shall have an
obligation under this title to require the purchase of flood
insurance for the building or mobile home securing the
loan until such letter is provided.
‘‘(4) APPLICABILITY.—This subsection shall apply to all loans
outstanding on or after the date of enactment of the Riegle
Community Development and Regulatory Improvement Act of
1994.’’.
SEC. 525. PENALTIES FOR FAILURE TO REQUIRE FLOOD INSURANCE
OR NOTIFY.
Section 102 of the Flood Disaster Protection Act of 1973 (42
U.S.C. 4012a), as amended by the preceding provisions of this
title, is further amended by adding at the end the following new
subsections:
H. R. 3474—102
‘‘(f) CIVIL MONETARY PENALTIES
FOR FAILURE TO REQUIRE
FLOOD INSURANCE OR NOTIFY.—
‘‘(1) CIVIL MONETARY PENALTIES AGAINST REGULATED LEND-
ERS.—Any regulated lending institution that is found to have
a pattern or practice of committing violations under paragraph
(2) shall be assessed a civil penalty by the appropriate Federal
entity for lending regulation in the amount provided under
paragraph (5).
‘‘(2) LENDER
VIOLATIONS.—The violations referred to in
paragraph (1) shall include—
‘‘(A) making, increasing, extending, or renewing loans
in violation of—
‘‘(i) the regulations issued pursuant to subsection
(b) of this section;
‘‘(ii) the escrow requirements under subsection (d)
of this section; or
‘‘(iii) the notice requirements under section 1364
of the National Flood Insurance Act of 1968; or
‘‘(B) failure to provide notice or purchase flood insur-
ance coverage in violation of subsection (e) of this section.
‘‘(3) CIVIL MONETARY PENALTIES AGAINST GSE’S.—
‘‘(A) IN GENERAL.—If the Federal National Mortgage
Association or the Federal Home Loan Mortgage Corpora-
tion is found by the Director of the Office of Federal Hous-
ing Enterprise Oversight of the Department of Housing
and Urban Development to have a pattern or practice
of purchasing loans in violation of the procedures estab-
lished pursuant to subsection (b)(3), the Director of such
Office shall assess a civil penalty against such enterprise
in the amount provided under paragraph (5) of this
subsection.
‘‘(B) DEFINITION.—For purposes of this subsection, the
term ‘enterprise’ means the Federal National Mortgage
Association 
or 
the 
Federal 
Home 
Loan 
Mortgage
Corporation.
‘‘(4) NOTICE AND HEARING.—A penalty under this subsection
may be issued only after notice and an opportunity for a hearing
on the record.
‘‘(5) AMOUNT.—A civil monetary penalty under this sub-
section may not exceed $350 for each violation under paragraph
(2) or paragraph (3). The total amount of penalties assessed
under this subsection against any single regulated lending
institution or enterprise during any calendar year may not
exceed $100,000.
‘‘(6) LENDER COMPLIANCE.—Notwithstanding any State or
local law, for purposes of this subsection, any regulated lending
institution that purchases flood insurance or renews a contract
for flood insurance on behalf of or as an agent of a borrower
of a loan for which flood insurance is required shall be consid-
ered to have complied with the regulations issued under
subsection (b).
‘‘(7) EFFECT OF TRANSFER ON LIABILITY.—Any sale or other
transfer of a loan by a regulated lending institution that has
committed a violation under paragraph (1), that occurs subse-
quent to the violation, shall not affect the liability of the
transferring lender with respect to any penalty under this
subsection. A lender shall not be liable for any violations relat-