Union Calendar No. 232
103D CONGRESS
2D SESSION
H. R. 3191
[Report No. 103–414]
A BILL
To revise the national flood insurance program to
promote compliance with requirements for man-
datory purchase of flood insurance, to provide as-
sistance for mitigation activities designed to re-
duce damages to structures subject to flooding
and shoreline erosion, and to increase the maxi-
mum coverage amounts under the program, and
for other purposes.
JANUARY 26, 1994
Reported with an amendment, committed to the Commit-
tee of the Whole House on the State of the Union, and
ordered to be printed.
IB
Union Calendar No. 232
103D CONGRESS
2D SESSION
H. R. 3191
[Report No. 103–414]
To revise the national flood insurance program to promote compliance with
requirements for mandatory purchase of flood insurance, to provide as-
sistance for mitigation activities designed to reduce damages to structures
subject to flooding and shoreline erosion, and to increase the maximum
coverage amounts under the program, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
SEPTEMBER 30, 1993
Mr. KENNEDY (for himself and Mr. DEUTSCH) introduced the following bill;
which was referred to the Committee on Banking, Finance and Urban Affairs
JANUARY 26, 1994
Reported with an amendment, committed to the Committee of the Whole
House on the State of the Union, and ordered to be printed
[Strike out all after the enacting clause and insert the part printed in italic]
[For text of introduced bill, see copy of bill as introduced on September 30, 1993]
A BILL
To revise the national flood insurance program to promote
compliance with requirements for mandatory purchase
of flood insurance, to provide assistance for mitigation
activities designed to reduce damages to structures sub-
ject to flooding and shoreline erosion, and to increase
the maximum coverage amounts under the program, and
for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the ‘‘Na-
tional Flood Insurance Reform Act of 1994’’.
(b) TABLE OF CONTENTS.—
Sec. 1. Short title and table of contents.
Sec. 2. Declaration of purpose under the National Flood Insurance Act of 1968.
TITLE I—DEFINITIONS
Sec. 101. Flood Disaster Protection Act of 1973.
Sec. 102. National Flood Insurance Act of 1968.
TITLE II—COMPLIANCE AND INCREASED PARTICIPATION
Sec. 201. Existing flood insurance purchase requirements.
Sec. 202. Expanded flood insurance purchase requirements.
Sec. 203. Escrow of flood insurance payments.
Sec. 204. Placement of flood insurance by lenders.
Sec. 205. Penalties for failure to require flood insurance or notify.
Sec. 206. Ongoing compliance with flood insurance purchase requirements.
Sec. 207. Fees for determining applicability of flood insurance purchase require-
ments.
Sec. 208. Notice requirements.
Sec. 209. Standard hazard determination forms.
Sec. 210. Examinations regarding compliance.
Sec. 211. Financial Institutions Examination Council.
Sec. 212. Clerical amendments.
TITLE III—RATINGS AND INCENTIVES FOR COMMUNITY
FLOODPLAIN MANAGEMENT PROGRAMS
Sec. 301. Community rating system and incentives for community floodplain
management.
Sec. 302. Funding.
TITLE IV—MITIGATION OF FLOOD AND EROSION RISKS
Sec. 401. Repeal of flooded property purchase and loan program.
Sec. 402. Termination of erosion-threatened structures program.
Sec. 403. Mitigation assistance responsibilities in Federal Insurance Administra-
tion.
Sec. 404. State and community mitigation assistance program.
Sec. 405. Establishment of National Flood and Erosion Mitigation Fund.
Sec. 406. Insurance premium mitigation surcharge and erosion hazard zone sur-
charge.
Sec. 407. Limitations on new flood insurance coverage in erosion hazard areas.
Sec. 408. Study of mitigation insurance.
Sec. 409. Riverine erosion study.
Sec. 410. Coordination with coastal zone management programs.
TITLE V—FLOOD INSURANCE TASK FORCE
Sec. 501. Flood Insurance Interagency Task Force.
TITLE VI—MISCELLANEOUS PROVISIONS
Sec. 601. Limitation on premium and surcharge increases.
Sec. 602. Maximum flood insurance coverage amounts.
Sec. 603. Flood insurance program arrangements with private insurance entities.
Sec. 604. Updating of flood maps and assessment and mapping of erosion hazard
zones.
Sec. 605. Study of economic effects of charging actuarially-based premium rates
for pre-FIRM structures.
Sec. 606. National Flood Insurance Fund.
Sec. 607. Effective dates of policies.
Sec. 608. Regulations.
Sec. 609. Relation to State and local laws.
SEC. 2. DECLARATION OF PURPOSE UNDER THE NATIONAL
FLOOD INSURANCE ACT OF 1968.
Section 1302(e) of the National Flood Insurance Act
of 1968 (42 U.S.C. 4001(e)) is amended—
(1) by redesignating clauses (3), (4), and (5), as
clauses (4), (5), and (6), respectively; and
(2) by inserting after the comma at the end of
clause (2) the following: ‘‘(3) encourage State and
local governments to protect natural and beneficial
floodplain functions that reduce flood-related losses,’’.
TITLE I—DEFINITIONS
SEC. 101. 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 Currency, the Office of Thrift
Supervision, and the National Credit Union Admin-
istration, and with respect to a particular regulated
lending institution means the entity primarily re-
sponsible for the supervision, approval, or regulation
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 follow-
ing new paragraphs:
‘‘(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) ‘lender’ includes any regulated lending in-
stitution, other lending institution, and Federal agen-
cy lender, but does not include any agency engaged
primarily in the purchase of mortgage loans;
‘‘(9) ‘other lending institution’ means any lend-
ing institution that is not subject to the supervision,
approval, regulation, or insuring of any Federal en-
tity for lending regulation and that is not a Federal
agency lender, but does not include institutions en-
gaged primarily in the purchase of mortgage loans;
‘‘(10) ‘regulated lending institution’ means any
bank, savings and loan association, credit union, or
similar institution subject to the supervision, ap-
proval, regulation, or insuring 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, 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.’’.
(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 (with
respect to regulated lending institutions), the Secretary of
Housing and Urban Development (with respect to other
lending institutions), and the appropriate head of each Fed-
eral agency lender, shall by regulation require the lenders’’.
SEC. 102. NATIONAL FLOOD INSURANCE ACT OF 1968.
(a) IN GENERAL.—Section 1370(a) of the National
Flood Insurance Act of 1968 (42 U.S.C. 4121(a)) is amend-
ed—
(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 follow-
ing new paragraphs:
‘‘(7) the term ‘erosion hazard area’ means, based
on erosion rate information and other historical data
available, an area where erosion or avulsion is likely
to result in damage to or loss of buildings and infra-
structure within a 60-year period;
‘‘(8) the term ‘readily movable structure’ means
a small permanent structure of less than 5,000 square
feet that is designed, sited, and built to accomplish re-
location at a reasonable cost relative to other struc-
tures of the same size and construction and that has
access of sufficient width and acceptable grade to per-
mit such relocation;
‘‘(9) the term ‘coastal’ means relating to the
coastlines and bays of the tidal waters of the United
States or the shorelines of the Great Lakes, but does
not refer to bayous, riverine areas, and riverine por-
tions of estuaries;
‘‘(10) the term ‘Federal agency lender’ means a
Federal agency that makes direct loans secured by im-
proved real estate or a mobile home, to the extent such
agency acts in such capacity;
‘‘(11) the term ‘Federal entity for lending regula-
tion’ means the Board of Governors of the Federal Re-
serve System, the Federal Deposit Insurance Corpora-
tion, the Comptroller of the Currency, the Office of
Thrift Supervision, and the National Credit Union
Administration, and with respect to a particular reg-
ulated lending institution means the entity primarily
responsible for the supervision, approval, or regula-
tion of the institution;
‘‘(12) the term ‘lender’ includes any regulated
lending institution, other lending institution, and
Federal agency lender, but does not include any agen-
cy engaged primarily in the purchase of mortgage
loans;
‘‘(13) the term ‘natural and beneficial floodplain
functions’ means (A) the functions associated with the
natural or relatively undisturbed floodplain that
moderate flooding, retain flood waters, reduce erosion
and sedimentation, and mitigate the effect of waves
(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, ap-
proved, regulated or insured financial institution’’ and in-
serting ‘‘regulated lending institution, other lending insti-
tution, or Federal agency lender’’.
TITLE II—COMPLIANCE AND
INCREASED PARTICIPATION
SEC. 201. EXISTING FLOOD INSURANCE PURCHASE RE-
QUIREMENTS.
Section 102(a) of the Flood Disaster Protection Act of
1973 (42 U.S.C. 4012a(a)) is amended—
(1) by inserting after ‘‘(a)’’ the following: ‘‘RE-
QUIREMENT FOR FEDERAL ASSISTANCE FOR ACQUISI-
TION OR CONSTRUCTION.—’’; and
(2) by adding at the end the following new sen-
tence: ‘‘This subsection may not be construed to per-
mit the provision of any amount of financial assist-
ance with respect to any building or mobile home and
related personal property for which flood insurance is
required under this subsection, unless the require-
ments under this subsection are complied with in full.
The prohibitions and requirements of this subsection
relating to financial assistance may not be waived for
any purpose.’’.
SEC. 202. EXPANDED FLOOD INSURANCE PURCHASE RE-
QUIREMENTS.
Section 102(b) of the Flood Disaster Protection 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 consulta-
tion and coordination with the Financial Institutions
Examination Council established under the Federal
Financial Institutions Examination Council Act of
1974) shall by regulation direct regulated lending in-
stitutions not to make, increase, extend, or renew,
after the expiration of 60 days following the date of
the enactment of this Act, any loan secured by im-
proved real estate or a mobile home located or to be
located in an area that has been identified by the Di-
rector 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 max-
imum limit of coverage made available under the Act
with respect to the particular type of property, which-
ever is less.
‘‘(2) OTHER LENDING INSTITUTIONS.—The Sec-
retary of Housing and Urban Development (after con-
sultation and coordination with the Financial Insti-
tutions Examination Council) shall by regulation di-
rect that—
‘‘(A) any other lending institution may not
make, increase, extend, or renew any loan se-
cured by improved real estate consisting of a 1-
to 4-family residence or a mobile home located or
to be located in an area that has been identified
by the Director of the Federal Emergency Man-
agement Agency as an area having special flood
hazards and in which flood insurance has been
made available under the National Flood Insur-
ance 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); and
‘‘(B) any loan that is—
‘‘(i) secured by improved real estate or
a mobile home located in an area that has
been identified at the time of the origina-
tion of the loan by the Director of the Fed-
eral Emergency Management Agency, as an
area of special flood hazards and in which
flood insurance is available under the Na-
tional Flood Insurance Act of 1968, and
‘‘(ii) purchased by the Government Na-
tional Mortgage Association,
is covered for the term of the loan by flood insur-
ance in the amount provided in paragraph (1).
‘‘(3) 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 of the Federal
Emergency Management Agency as an area having
special flood hazards and in which flood insurance
has been made available under the National Flood In-
surance 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). The rel-
evant head of each Federal agency lender shall issue
any regulations necessary to carry out this para-
graph. Such regulations shall be consistent with and
substantially identical to the regulations issued under
paragraphs (1) and (2).
‘‘(4) 
GOVERNMENT-SPONSORED
ENTERPRISES
FOR HOUSING.—The Federal National Mortgage Asso-
ciation and the Federal Home Loan Mortgage Cor-
poration shall implement procedures reasonably de-
signed to ensure that 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 by the Director as an area of special flood
hazards and in which flood insurance is avail-
able under the National Flood Insurance Act of
1968, and
‘‘(B) purchased by either such entity,
is covered for the term of the loan by flood insurance
in the amount provided in paragraph (1).
‘‘(5) CONTESTED
DETERMINATIONS.—If a bor-
rower under a loan disputes or challenges the deter-
mination of the lender that the improved real estate
or mobile home securing the loan is located in an
area of special flood hazards, the lender shall review
and consider any relevant information, as determined
by the Director, submitted to the lender by the bor-
rower.
‘‘(6) APPLICABILITY.—Paragraphs (2) through
(4) 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 the enact-
ment of the National Flood Insurance Reform Act of
1994.’’.
SEC. 203. 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) PRIVATE LENDERS.—For loans secured by
residential real estate, each Federal entity for lending
regulation (with respect to any loans of regulated
lending institutions) and the Secretary of Housing
and Urban Development (with respect to any loans of
other lending institutions), after consultation and co-
ordination with the Financial Institutions Examina-
tion Council, shall by regulation require that, if a
lender or other servicer of the loan requires the
escrowing of taxes, insurance premiums, fees, or any
other charges for a loan secured by residential real es-
tate or a mobile home, then all premiums and fees for
flood insurance under the National Flood Insurance
Act of 1968 for the residential real estate or mobile
home shall be paid to the lender or servicer of the
loan. Premiums and fees paid to the lender or servicer
‘‘(4) 
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 the enactment of the
National Flood Insurance Reform Act of 1994.’’.
SEC. 204. PLACEMENT OF FLOOD INSURANCE BY LENDERS.
(a) ACTIONS REQUIRED BY LENDER.—Section 102 of
the Flood Disaster Protection Act of 1973 (42 U.S.C.
4012a), as amended by the preceding provisions of this Act,
is further amended by adding at the end the following new
subsection:
‘‘(e) PLACEMENT OF FLOOD INSURANCE BY LEND-
ER.—
‘‘(1) NOTIFICATION TO BORROWER OF LACK OF
COVERAGE.—If, 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 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 covered by flood insurance in an amount less
than the amount required for the property pursuant
to subsection (b), the lender or servicer shall notify the
borrower under the loan that the borrower should ob-
tain, at the borrower’s expense, an amount of flood
insurance for the 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 60 days after such notifica-
tion, 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 pur-
chasing the insurance.
‘‘(3) REVIEW
OF
DETERMINATION
REGARDING
REQUIRED PURCHASE.—
‘‘(A) IN
GENERAL.—A borrower may re-
quest that the Director review a determination
that the improved real estate or mobile home se-
curing the loan is located in an area of special
flood hazards. Not later than 45 days after the
Director receives the request, the Director shall
review the determination and provide the bor-
rower with a letter stating whether or not the
property is in a special flood hazards area. The
determination of the Director shall be final.
‘‘(B) EFFECT
OF
DETERMINATION.—Any
person to whom a borrower provides a letter is-
sued by the Director pursuant to subparagraph
(A), stating that the property of the borrower is
not in an area of special flood hazards, shall
have no obligation under this title to require the
purchase of flood insurance on the property dur-
ing the 1-year period beginning upon the date
that such letter is provided.
‘‘(4) 
APPLICABILITY.—This 
subsection 
shall
apply to all loans outstanding on or after the date of
enactment of the National Flood Insurance Reform
Act of 1994.’’.
SEC. 205. PENALTIES FOR FAILURE TO REQUIRE FLOOD IN-
SURANCE OR NOTIFY.
Section 102 of the Flood Disaster Protection Act of
1973 (42 U.S.C. 4012a), as amended by the preceding pro-
visions of this Act, is further amended by adding at the
end the following new subsections:
‘‘(f) CIVIL MONETARY PENALTIES FOR FAILURE TO
REQUIRE FLOOD INSURANCE OR NOTIFY.—
‘‘(1) CIVIL MONETARY PENALTIES AGAINST LEND-
ERS.—Any regulated or other 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 (with respect to regulated lending
institutions) or the Secretary of Housing and Urban
Development (with respect to other lending institu-
tions) in the amount provided under paragraph (5).
‘‘(2) LENDER
VIOLATIONS.—The violations re-
ferred to in paragraph (1) shall be—
‘‘(A) making, increasing, extending, or re-
newing 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 Insur-
ance Act of 1968; or
‘‘(B) failure to provide notice or purchase
flood insurance coverage in violation of sub-
section (e) of this section.
‘‘(3) CIVIL
MONETARY
PENALTIES
AGAINST
GSE’S.—If the Federal National Mortgage Association
or the Federal Home Loan Mortgage Corporation is
found by the Director of the Office of Federal Housing
Enterprise Oversight of the Department of Housing
and Urban Development to have a pattern or practice
of purchasing loans in violation of the procedures es-
tablished pursuant to subsection (b)(4) of this section,
the Director of such Office shall assess a civil penalty
against such enterprise in the amount provided under
paragraph (5) of this subsection. 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 subsection 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, other
lending institution, or enterprise for any calendar
year may not exceed $100,000.
‘‘(6) LENDER
COMPLIANCE.—Notwithstanding
any State or local law, for purposes of this subsection,
any lender 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 insur-
ance is required shall be considered 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 lender who has
committed a violation under paragraph (1), that oc-
curs subsequent to the violation, shall not affect the li-
ability of the transferring lender with respect to any
penalty under this subsection. A lender shall not be
liable for any violations relating to a loan committed
by another lender who previously held the loan.
‘‘(8) DEPOSIT
OF
PENALTIES.—Any penalties
collected under this subsection shall be paid into the
National Flood and Erosion Mitigation Fund under
section 1367 of the National Flood Insurance Act of
1968.
‘‘(9) ADDITIONAL
PENALTIES.—Any penalty
under this subsection shall be in addition to any civil
remedy or criminal penalty otherwise available.
‘‘(10) STATUTE
OF
LIMITATIONS.—No penalty
may be imposed under this subsection after the expi-
ration of the 5-year period beginning on the date of
the occurrence of the violation for which the penalty
is authorized under this subsection.
‘‘(g) OTHER ACTIONS TO REMEDY PATTERN OF NON-
COMPLIANCE.—
‘‘(1) AUTHORITY
OF
FEDERAL
ENTITIES
FOR
LENDING REGULATION.—The head of the applicable
Federal entity for lending regulation may require a
regulated lending institution to take such remedial
actions as are necessary to ensure that the regulated
lending institution complies with the requirements of
the national flood insurance program if the Federal
agency for lending regulation makes a determination
under paragraph (3) regarding the regulated lending
institution.
‘‘(2) AUTHORITY OF SECRETARY OF HUD.—The
Secretary of Housing and Urban Development may
require another lending institution to take such reme-
dial actions as are necessary to ensure that the other
lending institution complies with the requirements of
the national flood insurance program if such Sec-
retary makes a determination under paragraph (3)
regarding the other lending institution.
‘‘(3) DETERMINATION OF VIOLATIONS.—A deter-
mination under this paragraph shall be a finding
that—
‘‘(A) the regulated lending institution or
other lending institution, as the case may be, has
engaged in a pattern and practice of noncompli-
ance in violation of the regulations issued pursu-
ant to subsection (b), (d), or (e) of this section
or the notice requirements under section 1364 of
the National Flood Insurance Act of 1968; and
‘‘(B) the regulated lending institution or
other lending institution, as the case may be, has
not demonstrated measurable improvement in
compliance despite the assessment of civil mone-
tary penalties under subsection (f).’’.
SEC. 206. ONGOING COMPLIANCE WITH FLOOD INSURANCE
PURCHASE REQUIREMENTS.
Section 102 of the Flood Disaster Protection Act of
1973 (42 U.S.C. 4012a), as amended by the preceding pro-
visions of this Act, is further amended by adding at the
end the following new subsection:
‘‘(h) NOTIFICATION OF FLOOD HAZARDS TO LOAN
TRANSFEREE.—
‘‘(1) IN GENERAL.—Except as provided in para-
graphs (2) through (5), before the sale or transfer of
any loan secured by improved real estate or a mobile
home, the seller or transferor of the loan shall deter-
mine whether the property is in an area that has been
designated by the Director as an area having special
flood hazards. The seller or transferor shall, before sale
or transfer, notify the purchaser or transferee and
any servicer of the loan in writing regarding the re-
sults of the determination. A determination under
this paragraph shall be evidenced using the standard
hazard determination form under section 1365 of the
National Flood Insurance Act of 1968.
‘‘(2) EXCEPTIONS.—For any loan secured by im-
proved real estate or a mobile home, a determination
and notice under paragraph (1) shall not be required
if, during the 5-year period ending on the date of the
sale or transfer of the loan—
‘‘(A) a determination and notice under
paragraph (1) has been made for the property se-
cured by the loan; or
‘‘(B)(i) the loan has been made, increased,
extended, or renewed; and
‘‘(ii) the lender making, increasing, extend-
ing, or renewing the loan was subject, at the
time of such transaction, to regulations issued
pursuant to paragraph (1), (2), or (3) of sub-
section (b).
‘‘(3) LOANS TRANSFERRED BY FDIC.—
‘‘(A) IN GENERAL.—Except as provided in
subparagraph (B), for any loan secured by im-
proved real estate or a mobile home that is sold
or transferred by the Federal Deposit Insurance
Corporation acting in its corporate capacity or
in its capacity as conservator or receiver, the
purchaser or transferee of the loan shall deter-
mine whether the property is in an area that has
been designated by the Director as an area hav-
ing special flood hazards.
‘‘(B) 
EXCEPTIONS.—Such 
determination
and notice shall not be required for any loan—
‘‘(i) sold or transferred to an entity
under the control of the Federal Deposit In-
surance Corporation; or
‘‘(ii) for which the purchaser or trans-
feree exercises any available option to trans-
fer or put the loan back to the Federal De-
posit Insurance Corporation.
‘‘(C) NOTICE TO DIRECTOR.—A purchaser
or transferee of a loan required to make a deter-
mination and notification under subparagraph
(A) shall notify the Director and any servicer of
the loan of the results of the determination
(using the standard hazard determination form
under section 1365 of the National Flood Insur-
ance Act of 1968) before the expiration of the 90-
day period beginning on the later of (i) the pur-
chase or transfer of the loan, or (ii) the expira-
tion of any option that the purchaser or trans-
feree may have to transfer or put the loan back
to the Federal Deposit Insurance Corporation.
‘‘(4) LOANS TRANSFERRED BY RTC.—
‘‘(A) IN GENERAL.—For any loan secured
by improved real estate or a mobile home that is
sold or transferred by the Resolution Trust Cor-
poration acting in its corporate capacity or in
its capacity as a conservator or receiver, the pur-
chaser or transferee of the loan shall determine
whether the property is in an area that has been
designated by the Director as an area having
special flood hazards if—
‘‘(i) the Resolution Trust Corporation
acquires the loan after the date of the effec-
tiveness of this subsection and sells or trans-
fers the loan before the expiration of the 12-
month period beginning on such effective
date; or
‘‘(ii) the Corporation holds the loan on
the date of the effectiveness of this subsection
and sells or transfers the loan before the ex-
piration of the 6-month period beginning on
such effective date.
‘‘(B) NOTICE TO DIRECTOR.—A purchaser
or transferee of a loan required to make a deter-
mination and notification under subparagraph
(A) shall notify the Director and any servicer of
the loan of the results of the determination
(using the standard hazard determination form
under section 1365 of the National Flood Insur-
ance Act of 1968) before the expiration of the 90-
day period beginning upon the purchase or
transfer of the loan.
‘‘(5) LOANS TRANSFERRED BY NCUA.—
‘‘(A) IN GENERAL.—Except as provided in
subparagraph (C), for any loan secured by im-
proved real estate or a mobile home that is sold
or transferred by the National Credit Union Ad-
ministration acting in its corporate capacity or
in its capacity as a conservator or liquidating
agent, the purchaser or transferee of the loan
shall determine whether the property is in an
area that has been designated by the Director as
an area having special flood hazards.
‘‘(B) NOTICE TO DIRECTOR.—A purchaser
or transferee of a loan required to make a deter-
mination and notification under subparagraph
(A) shall notify the Director and any servicer of
the loan of the results of the determination
(using the standard hazard determination form
under section 1365 of the National Flood Insur-
ance Act of 1968) before the expiration of the 90-
day period beginning upon the purchase or
transfer of the loan.
‘‘(C) EXCEPTION.—Such determination and
notice shall not be required for any loan sold or
transferred to an entity under the control of the
National Credit Union Administration.
‘‘(6) 
APPLICABILITY.—This 
subsection 
shall
apply only with respect to any loan outstanding or
entered into after the expiration of the 1-year period
beginning on the date of the enactment of the Na-
tional Flood Insurance Reform Act of 1994.’’.
SEC. 207. FEES FOR DETERMINING APPLICABILITY OF
FLOOD 
INSURANCE 
PURCHASE 
REQUIRE-
MENTS.
Section 102 of the Flood Disaster Protection Act of
1973 (42 U.S.C. 4012a) as amended by the preceding provi-
sions of this Act, is further amended by adding at the end
the following new subsection:
‘‘(i) FEE
FOR DETERMINING LOCATION.—Notwith-
standing any other Federal or State law, any lender for
a loan described in paragraph (1), (2), or (3) of subsection
(b) may charge a reasonable fee (as determined by the Di-
rector) for the costs of determining whether the property se-
curing the loan is located in an area of special flood haz-
ards, but only in accordance with the following require-
ments:
‘‘(1) BORROWER FEE.—The borrower under such
a loan may be charged the fee, but only if the deter-
mination is made pursuant to—
‘‘(A) the making, increasing, extending, or
renewing of the loan that is initiated by the bor-
rower; or
‘‘(B) a revision or updating under section
1360(f) of the floodplain areas and flood-risk
zones or publication of a notice or compendia
under subsection (h) or (i) of section 1360 that
affects the area in which the property securing
the loan is located or that, in the determination
of the Director, may reasonably be considered to
require a determination under this subsection.
‘‘(2) PURCHASER
OR
TRANSFEREE
FEE.—The
purchaser or transferee of such a loan may be charged
the fee in the case of sale or transfer of the loan.’’.
SEC. 208. NOTICE REQUIREMENTS.
Section 1364 of the National Flood Insurance Act of
1968 (42 U.S.C. 4104a) is amended to read as follows:
‘‘NOTICE REQUIREMENTS
‘‘SEC. 1364. (a) NOTIFICATION OF SPECIAL FLOOD
HAZARDS.—
‘‘(1) REGULATED LENDING INSTITUTIONS.—Each
Federal entity for lending regulation, after consulta-
tion and coordination with the Financial Institutions
Examination Council, shall by regulation require reg-
ulated lending institutions, as a condition of making,
increasing, extending, or renewing 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 under this title or the Flood Disaster
Protection Act of 1973 as an area having special flood
hazards, to notify the purchaser or lessee (or obtain
satisfactory assurances that the seller or lessor has no-
tified the purchaser or lessee) and the servicer of the
loan of such special flood hazards, in writing, a rea-
sonable period in advance of the signing of the pur-
chase agreement, lease, or other documents involved in
the transaction. The regulations shall also require
that the lenders retain a record of the receipt of the
notices by the purchaser or lessee and the servicer.
‘‘(2) OTHER LENDING INSTITUTIONS.—The Sec-
retary of Housing and Urban Development shall by
regulation require notification in the manner pro-
vided under paragraph (1) with respect to any loan
made by another lending institution and secured by
improved real estate consisting of a 1- to 4-family
residence or a mobile home located or to be located in
an area that has been identified by the Director under
this title or the Flood Disaster Protection Act of 1973
as an area having special flood hazards. Any regula-
tions issued under this paragraph shall be consistent
with and substantially identical to the regulations is-
sued under paragraph (1) (except to the extent nec-
essary to provide for differences between the types of
loans for which notice is required under this para-
graph and the types for which notice is required
under paragraph (1)).
‘‘(3) FEDERAL AGENCY LENDERS.—The appro-
priate head of each Federal agency lender shall by
regulation require notification in the manner pro-
vided under paragraph (1) with respect to any loan
that is made by the Federal agency lender and se-
cured by improved real estate or a mobile home lo-
cated or to be located in an area that has been identi-
fied by the Director under this title or the Flood Dis-
aster Protection Act of 1973 as an area having spe-
cial flood hazards. Any regulations issued under this
paragraph shall be consistent with and substantially
identical to the regulations issued under paragraph
(1).
‘‘(4) CONTENTS OF NOTICE.—Written notifica-
tion required under this subsection shall include—
‘‘(A) a warning, in a form to be established
in consultation with and subject to the approval
of the Director, stating that the real estate or
mobile home securing the loan is located or is to
be located in an area having special flood haz-
ards;
‘‘(B) a description of the flood insurance
purchase requirements under section 102(b) of
the Flood Disaster Protection Act of 1973;
‘‘(C) a statement that flood insurance cov-
erage may be purchased under the national flood
insurance program and is also available from
private insurers; and
‘‘(D) any other information that the Direc-
tor considers necessary to carry out the purposes
of the national flood insurance program.
‘‘(b) NOTIFICATION OF CHANGE OF SERVICER.—
‘‘(1) LENDING INSTITUTIONS.—Each Federal en-
tity for lending regulation (with respect to regulated
lending institutions) and the Secretary of Housing
and Urban Development (with respect to other lend-
ing institutions), after consultation and coordination
with the Financial Institutions Examination Council,
shall by regulation require such institutions, as a con-
dition of making, increasing, extending, renewing,
selling, or transferring any loan described in sub-
section (a)(1), to notify the Director (or the designee
of the Director) in writing during the term of the
loan of the servicer of the loan. Such institutions shall
also notify the Director (or such designee) of any
change in the servicer of the loan, not later than 60
days after the effective date of such change. The regu-
lations under this subsection shall provide that upon
any change in the servicing of a loan, the duty to
provide notification under this subsection shall trans-
fer to the transferee servicer of the loan.
‘‘(2) FEDERAL AGENCY LENDERS.—The appro-
priate head of each Federal agency lender shall by
regulation provide for notification in the manner pro-
vided under paragraph (1) with respect to any loan
described in subsection (a)(1) that is made by the
Federal agency lender. Any regulations issued under
this paragraph shall be consistent with and substan-
tially identical to the regulations issued under para-
graph (1) of this subsection.
‘‘(c) NOTIFICATION OF EXPIRATION OF INSURANCE.—
The Director (or the designee of the Director) shall, not less
than 45 days before the expiration of any contract for flood
insurance under this title, issue notice of such expiration
by first class mail to the owner of the property, the servicer
of any loan secured by the property covered by the contract,
and the owner of the loan.’’.
SEC. 209. STANDARD HAZARD DETERMINATION FORMS.
Chapter III of the National Flood Insurance Act of
1968 (42 U.S.C. 4101 et seq.) is amended by adding at the
end the following new section:
‘‘STANDARD HAZARD DETERMINATION FORMS
‘‘SEC. 1365. (a) DEVELOPMENT.—The Director, in
consultation with representatives of the mortgage and lend-
ing industry, the Federal entities for lending regulation, the
Federal agency lenders, and any other appropriate individ-
uals, shall develop standard written and electronic forms
for determining the flood hazard exposure of a property for
use in connection with loans secured by improved real estate
or a mobile home. The written and electronic forms shall
be established by regulations issued not later than 270 days
after the date of the enactment of the National Flood Insur-
ance Reform Act of 1994.
‘‘(b) DESIGN AND CONTENTS.—
‘‘(1) PURPOSE.—The form under subsection (a)
shall be designed to facilitate a determination of the
exposure to flood hazards of structures located on the
property to which the loan application relates. The
form shall be designed to facilitate compliance with
the provisions of this title.
‘‘(2) CONTENTS.—The form shall require identi-
fication of the type of flood-risk zone in which the
property is located, the complete map and panel
numbers for the property, and the date of the map
used for the determination, with respect to flood haz-
ard information on file with the Director. If the prop-
erty is not located in an area of special flood hazards
the form shall require a statement to such effect and
shall indicate the complete map and panel numbers
of the property. If the complete map and panel num-
bers for the property are not available because the
property is not located in a community that is par-
ticipating in the national flood insurance program or
because no map exists for the relevant area, the form
shall require a statement to such effect. The form shall
provide for inclusion or attachment of any relevant
documents indicating revisions or amendments to
maps.
‘‘(c) REQUIRED USE.—The Federal entities for lending
regulation shall by regulation require the use of the form
under this section by regulated lending institutions. The ap-
propriate head of each Federal agency lender shall by regu-
lation provide for the use of the form with respect to any
loan made by such Federal agency lender. The Secretary
of Housing and Urban Development shall by regulation re-
quire use of the form in connection with loans purchased
by Federal National Mortgage Association and the Federal
Home Loan Mortgage Corporation and the Government Na-
tional Mortgage Association. The Secretary of Housing and
Urban Development shall encourage the use of the form by
other lending institutions.
‘‘(d) GUARANTEES
REGARDING
INFORMATION.—In
providing information regarding special flood hazards on
the form developed under this section (or otherwise required
of a lender not required to use the form under this section)
any lender making, increasing, extending, or renewing a
loan secured by improved real estate or a mobile home may
provide for the acquisition or determination of such infor-
mation to be made by a person other than such institution,
only to the extent such person guarantees the accuracy of
the information. The Director shall by regulations establish
requirements relating to the nature and manner of such
guarantees.
‘‘(e) ELECTRONIC FORM.—The Federal entities for
lending regulation, the Secretary of Housing and Urban
Development, and the appropriate head of each Federal
agency lender shall by regulation require any lender using
the electronic form developed under this section with respect
to any loan to make available upon the request of such Fed-
eral entity, Secretary, or agency head, a written form under
this section for such loan within 48 hours after such request.
‘‘(f) EFFECTIVE DATE.—The regulations under this
section requiring use of the written and electronic forms es-
tablished pursuant to this section shall be issued together
with the regulations required under subsection (a) and shall
take effect upon the expiration of the 90-day period begin-
ning on such issuance.’’.
SEC. 210. EXAMINATIONS REGARDING COMPLIANCE.
(a) AMENDMENT TO FEDERAL DEPOSIT INSURANCE
ACT.—Section 10 of the Federal Deposit Insurance Act (12
U.S.C. 1820) is amended by adding at the end the following
new subsection:
‘‘(h) FLOOD INSURANCE COMPLIANCE
BY INSURED
DEPOSITORY INSTITUTIONS.—
‘‘(1) EXAMINATIONS.—The appropriate Federal
banking agency shall, during each scheduled on-site
examination required by this section, determine
whether the insured depository institution is comply-
ing with the requirements of the national flood insur-
ance program.
‘‘(2) REPORT.—
‘‘(A) REQUIREMENT.—Not later than 1 year
after the date of enactment of the National Flood
Insurance Reform Act of 1994 and biennially
thereafter for the next 4 years, each appropriate
Federal banking agency shall submit a report to
the Congress on compliance by insured deposi-
tory institutions with the requirements of the na-
tional flood insurance program.
‘‘(B) CONTENTS.—The report shall include
a description of the methods used to determine
compliance, the number of institutions examined
during the reporting year, a listing and total
number of institutions found not to be in compli-
ance, actions taken to correct incidents of non-
compliance, and an analysis of compliance, in-
cluding a discussion of any trends, patterns, and
problems, and recommendations regarding rea-
sonable actions to improve the efficiency of the
examinations processes.’’.
(b) AMENDMENT TO FEDERAL CREDIT UNION ACT.—
Section 204 of the Federal Credit Union Act (12 U.S.C.
1784) is amended by adding at the end the following new
subsection:
‘‘(e) FLOOD INSURANCE COMPLIANCE
BY INSURED
CREDIT UNIONS.—
‘‘(1) EXAMINATION.—The Board shall, during
each examination conducted under this section, deter-
mine whether the insured credit union is complying
with the requirements of the national flood insurance
program.
‘‘(2) REPORT.—
‘‘(A) REQUIREMENT.—Not later than 1 year
after the date of enactment of the National Flood
Insurance Reform Act of 1994 and biennially
thereafter for the next 4 years, the Board shall
submit a report to Congress on compliance by
insured credit unions with the requirements of
the national flood insurance program.
‘‘(B) CONTENTS.—The report shall include
a description of the methods used to determine
compliance, the number of insured credit unions
examined during the reporting year, a listing
and total number of insured credit unions found
not to be in compliance, actions taken to correct
incidents of noncompliance, and an analysis of
compliance, including a discussion of any
trends, 
patterns, 
and 
problems, 
and 
rec-
ommendations regarding reasonable actions to
improve the efficiency of the examinations proc-
esses.’’.
(c) AMENDMENT TO FEDERAL HOUSING ENTERPRISES
FINANCIAL SAFETY AND SOUNDNESS ACT OF 1992.—Sec-
tion 1317 of the Federal Housing Enterprises Financial
Safety and Soundness Act of 1992 (12 U.S.C. 4517) is
amended by adding at the end the following new subsection:
‘‘(g) FLOOD INSURANCE COMPLIANCE
BY ENTER-
PRISES.—
‘‘(1) EXAMINATION.—After the submission of the
report under section 210(d) of the National Flood In-
surance Reform Act of 1994, the Director shall, dur-
ing each annual examination of an enterprise con-
ducted under this section, determine whether the en-
terprise has established adequate procedures required
under section 102(b)(4) of the Flood Disaster Protec-
tion Act of 1973 and is complying with such proce-
dures.
‘‘(2) EXCEPTION.—The provisions of paragraph
(1) shall not apply with respect to an enterprise if the
Director—
‘‘(A) determines, pursuant to the report
under section 210(d) of the National Flood In-
surance Reform Act of 1994, that the enterprise
has established adequate procedures pursuant to
section 102(b)(4) of the Flood Disaster Protection
Act of 1973 and has a pattern of compliance
with such procedures; and
‘‘(B) certifies such finding in writing to the
Congress.
‘‘(3) REPORT.—
‘‘(A) REQUIREMENT.—Not later than 1 year
after the date of enactment of the National Flood
Insurance Reform Act of 1994 and biennially
thereafter for the next 4 years, the Director shall
submit a report to Congress on compliance by
the enterprises with the procedures established
pursuant to section 102(b)(4) of the Flood Disas-
ter Protection Act of 1973.
‘‘(B) CONTENTS.—The report shall include
a description of the methods used to determine
compliance, identification of any enterprise
found not to be in compliance, actions taken to
correct incidents of noncompliance, and an anal-
ysis of compliance, including a discussion of any
trends, 
patterns, 
and 
problems, 
and 
rec-
ommendations regarding reasonable actions to
improve the efficiency of the examinations proc-
esses.’’.
(d) GAO REPORT ON GSE COMPLIANCE.—Not later
than 18 months after the date of enactment of this Act, the
Comptroller General of the United States shall submit a re-
port to the Congress and the Director of the Office of Federal
Housing Enterprise Oversight of the Department of Hous-
ing and Urban Development regarding the procedures es-
tablished by the Federal National Mortgage Association and
the Federal Home Loan Mortgage Corporation pursuant to
section 102(b)(4) of the Flood Disaster Protection Act of
1973. The report shall include a description of such proce-
dures, an analysis of whether such procedures are sufficient
to comply with the requirements of such section, a deter-
mination of whether each enterprise has complied with such
procedures, a description of any actions taken by each en-
terprise to correct any incidents of noncompliance, and any
recommendations regarding reasonable actions to improve
the procedures established by the enterprises and compliance
with such procedures.
SEC. 211. FINANCIAL INSTITUTIONS EXAMINATION COUN-
CIL.
Section 1006 of the Federal Financial Institutions Ex-
amination Council Act of 1978 (12 U.S.C. 3305) is amend-
ed by adding at the end the following new subsection:
‘‘(g) The council shall consult and assist the Federal
entities for lending regulation and the Secretary of Housing
and Urban Development in developing and coordinating
uniform standards and requirements for use by lenders as
provided under the National Flood Insurance Act of 1968
and the Flood Disaster Protection Act of 1973.’’.