35286 Federal Register / Vol. 60, No. 129 / Thursday, July 6, 1995 / Rules and Regulations
1 One change effected by the Reform Act is to
make Farm Credit System institutions subject for
the first time to the requirements of the 68 Act and
the 73 Act. See sections 1370(a)(13) of the 68 Act
(42 U.S.C. 4121(a)); and 3(a)(10) of the 73 Act (42
U.S.C. 4003(a)(10)). As a result, the FCA, the
Federal entity responsible for the supervision of
such institutions, must promulgate regulations to
implement the requirements of these statutes. This
final rule is part of that project.
DEPARTMENT OF THE TREASURY
Office of the Comptroller of the
Currency
12 CFR Part 22
[Docket No. 95–12]
RIN 1557–AB47
FEDERAL RESERVE SYSTEM
12 CFR Part 208
[Regulation H, Docket No. R–0882]
FEDERAL DEPOSIT INSURANCE
CORPORATION
12 CFR Part 339
RIN 3064–AB62
DEPARTMENT OF THE TREASURY
Office of Thrift Supervision
12 CFR Part 563
[No. 95–124]
RIN 1550–AA82
FARM CREDIT ADMINISTRATION
12 CFR Part 614
RIN 3052–AB57
NATIONAL CREDIT UNION
ADMINISTRATION
12 CFR Part 760
Loans in Areas Having Special Flood
Hazards
AGENCIES: Office of the Comptroller of
the Currency, Treasury (OCC); Board of
Governors of the Federal Reserve
System (Board); Federal Deposit
Insurance Corporation (FDIC); Office of
Thrift Supervision, Treasury (OTS);
Farm Credit Administration (FCA); and
National Credit Union Administration
(NCUA) (collectively, the Federal
entities for lending regulation or the
agencies).
ACTION: Joint final rule.
SUMMARY: The OCC, Board, FDIC, OTS,
and NCUA are amending their
regulations concerning loans in areas
having special flood hazards to require
depository institutions to use the
Standard Flood Hazard Determination
Form (the standard form) in determining
whether real property offered as
collateral for a loan is located in a
special flood hazard area. The FCA is
adopting this same requirement in new
regulations. The standard form has been
developed by the Federal Emergency
Management Agency (the FEMA), in
consultation with the Federal entities
for lending regulation and other
agencies. Use of the standard form will
help ensure that borrowers obtain the
required flood insurance for improved
real property and mobile homes located
in special flood hazard areas.
EFFECTIVE DATE: January 2, 1996.
FOR FURTHER INFORMATION CONTACT:
OCC: Carol Workman, Compliance
Specialist, Compliance Management
(202) 874–4858, Margaret Hesse,
Attorney, Community and Consumer
Law Division, (202) 874–5750, or
Jacqueline L. Lussier, Senior Attorney,
Legislative and Regulatory Activities
Division, Office of Chief Counsel, (202)
874–5090, Office of the Comptroller of
the Currency, 250 E Street, SW,
Washington, D.C. 20219.
BOARD: Diane Jackins, Senior Review
Examiner, or Jennifer Lowe, Review
Examiner, Division of Consumer and
Community Affairs, (202) 452–3946, or
Lawranne Stewart, Senior Attorney,
(202) 452–3513, or Rick Heyke,
Attorney, (202) 452–3688, Legal
Division, Board of Governors of the
Federal Reserve System, 20th Street and
Constitution Avenue, NW, Washington,
D.C. 20551.
FDIC: Mark Mellon, Senior Attorney,
Regulation and Legislation Section,
Legal Division, (202) 898–3854, or Ken
Baebel, Senior Review Examiner, (202)
942–3086, or Barbara L. Boehm,
Consumer Affairs Specialist, (202) 942–
3631, Division of Compliance and
Consumer Affairs, Federal Deposit
Insurance Corporation, 550 17th Street,
NW., Washington, D.C. 20429.
OTS: Larry Clark, Program Manager,
Compliance Policy, (202) 906–5628, or
Catherine Shepard, Senior Attorney,
Regulation and Legislation Division,
Office of the Chief Counsel, (202) 906–
7275, Office of Thrift Supervision, 1700
G Street, NW, Washington, D.C. 20552.
FCA: Robert G. Magnuson, Policy
Analyst, Regulation Development,
Office of Examination, (703) 883–4498,
or William L. Larsen, Senior Attorney,
Office of General Counsel, (703) 883–
4020, Farm Credit Administration, 1501
Farm Credit Drive, McLean, VA 22102–
5090.
NCUA: Kimberly Iverson, Program
Officer, (703) 518–6375, or Jeffrey S.
Mooney, Staff Attorney, (703) 518–6563,
1775 Duke Street, Alexandria, VA
22314–3428.
SUPPLEMENTARY INFORMATION:
I. Background
Federal Flood Insurance Legislation
Congress enacted the National Flood
Insurance Act of 1968 (the 68 Act) (Pub.
L. 90–448, 82 Stat. 476) and the Flood
Disaster Protection Act of 1973 (the 73
Act) (Pub. L. 93–234, 87 Stat. 975) to
provide, through the authorization of a
Federal flood insurance program, an
opportunity for property owners to
purchase protection for property subject
to flooding. The 68 Act and the 73 Act
are codified at 42 U.S.C. 4001 et seq.
The Reform Act
Amendments to the 68 Act and the 73
Act are set forth in the National Flood
Insurance Reform Act of 1994 (the
Reform Act), Title V of the Riegle
Community Development and
Regulatory Improvement Act of 1994
(Pub. L. 103–325, 108 Stat. 2160).
Several of these amendments require
implementing regulations by the Federal
entities for lending regulation.1
As amended by the Reform Act, the
73 Act directs the Federal entities for
lending regulation (a term defined by
section 3(a)(5) of the 73 Act (42 U.S.C.
4003(a)(5)) to include the OCC, Board,
FDIC, OTS, FCA, and the NCUA) to
issue regulations which direct regulated
lending institutions (a term defined by
section 3(a)(10) of the 73 Act (42 U.S.C.
4003(a)(10)) to include any bank,
savings and loan association, Farm
Credit System institution, and credit
union) which are subject to their
supervision to ensure that any loan
secured by improved real estate or a
mobile home (real property) located or
to be located in a special flood hazard
area is covered for the term of the loan
by flood insurance. Section 102(b) of the
73 Act (42 U.S.C. 4012a(b)).
Standard Flood Hazard Determination
Form
Section 528 of the Reform Act amends
the 68 Act by adding a new section 1365
(42 U.S.C. 4104b). Section 1365(a) of the
68 Act requires the Director of the
FEMA, in consultation with the Federal
entities for lending regulation (among
others), to develop a Standard Flood
Hazard Determination Form for use in
determining whether real property
offered as collateral on a loan is located
in a special flood hazard area. Section
1365(a) states that the standard form
shall be established by FEMA
regulations issued not later than 270
days after the date of enactment of the
Reform Act. The Reform Act was signed
1 One change effected by the Reform Act is to
make Farm Credit System institutions subject for
the first time to the requirements of the 68 Act and
the 73 Act. See sections 1370(a)(13) of the 68 Act
(42 U.S.C. 4121(a)); and 3(a)(10) of the 73 Act (42
U.S.C. 4003(a)(10)). As a result, the FCA, the
Federal entity responsible for the supervision of
such institutions, must promulgate regulations to
implement the requirements of these statutes. This
final rule is part of that project.
DEPARTMENT OF THE TREASURY
Office of the Comptroller of the
Currency
12 CFR Part 22
[Docket No. 95–12]
RIN 1557–AB47
FEDERAL RESERVE SYSTEM
12 CFR Part 208
[Regulation H, Docket No. R–0882]
FEDERAL DEPOSIT INSURANCE
CORPORATION
12 CFR Part 339
RIN 3064–AB62
DEPARTMENT OF THE TREASURY
Office of Thrift Supervision
12 CFR Part 563
[No. 95–124]
RIN 1550–AA82
FARM CREDIT ADMINISTRATION
12 CFR Part 614
RIN 3052–AB57
NATIONAL CREDIT UNION
ADMINISTRATION
12 CFR Part 760
Loans in Areas Having Special Flood
Hazards
AGENCIES: Office of the Comptroller of
the Currency, Treasury (OCC); Board of
Governors of the Federal Reserve
System (Board); Federal Deposit
Insurance Corporation (FDIC); Office of
Thrift Supervision, Treasury (OTS);
Farm Credit Administration (FCA); and
National Credit Union Administration
(NCUA) (collectively, the Federal
entities for lending regulation or the
agencies).
ACTION: Joint final rule.
SUMMARY: The OCC, Board, FDIC, OTS,
and NCUA are amending their
regulations concerning loans in areas
having special flood hazards to require
depository institutions to use the
Standard Flood Hazard Determination
Form (the standard form) in determining
whether real property offered as
collateral for a loan is located in a
special flood hazard area. The FCA is
adopting this same requirement in new
regulations. The standard form has been
developed by the Federal Emergency
Management Agency (the FEMA), in
consultation with the Federal entities
for lending regulation and other
agencies. Use of the standard form will
help ensure that borrowers obtain the
required flood insurance for improved
real property and mobile homes located
in special flood hazard areas.
EFFECTIVE DATE: January 2, 1996.
FOR FURTHER INFORMATION CONTACT:
OCC: Carol Workman, Compliance
Specialist, Compliance Management
(202) 874–4858, Margaret Hesse,
Attorney, Community and Consumer
Law Division, (202) 874–5750, or
Jacqueline L. Lussier, Senior Attorney,
Legislative and Regulatory Activities
Division, Office of Chief Counsel, (202)
874–5090, Office of the Comptroller of
the Currency, 250 E Street, SW,
Washington, D.C. 20219.
BOARD: Diane Jackins, Senior Review
Examiner, or Jennifer Lowe, Review
Examiner, Division of Consumer and
Community Affairs, (202) 452–3946, or
Lawranne Stewart, Senior Attorney,
(202) 452–3513, or Rick Heyke,
Attorney, (202) 452–3688, Legal
Division, Board of Governors of the
Federal Reserve System, 20th Street and
Constitution Avenue, NW, Washington,
D.C. 20551.
FDIC: Mark Mellon, Senior Attorney,
Regulation and Legislation Section,
Legal Division, (202) 898–3854, or Ken
Baebel, Senior Review Examiner, (202)
942–3086, or Barbara L. Boehm,
Consumer Affairs Specialist, (202) 942–
3631, Division of Compliance and
Consumer Affairs, Federal Deposit
Insurance Corporation, 550 17th Street,
NW., Washington, D.C. 20429.
OTS: Larry Clark, Program Manager,
Compliance Policy, (202) 906–5628, or
Catherine Shepard, Senior Attorney,
Regulation and Legislation Division,
Office of the Chief Counsel, (202) 906–
7275, Office of Thrift Supervision, 1700
G Street, NW, Washington, D.C. 20552.
FCA: Robert G. Magnuson, Policy
Analyst, Regulation Development,
Office of Examination, (703) 883–4498,
or William L. Larsen, Senior Attorney,
Office of General Counsel, (703) 883–
4020, Farm Credit Administration, 1501
Farm Credit Drive, McLean, VA 22102–
5090.
NCUA: Kimberly Iverson, Program
Officer, (703) 518–6375, or Jeffrey S.
Mooney, Staff Attorney, (703) 518–6563,
1775 Duke Street, Alexandria, VA
22314–3428.
SUPPLEMENTARY INFORMATION:
I. Background
Federal Flood Insurance Legislation
Congress enacted the National Flood
Insurance Act of 1968 (the 68 Act) (Pub.
L. 90–448, 82 Stat. 476) and the Flood
Disaster Protection Act of 1973 (the 73
Act) (Pub. L. 93–234, 87 Stat. 975) to
provide, through the authorization of a
Federal flood insurance program, an
opportunity for property owners to
purchase protection for property subject
to flooding. The 68 Act and the 73 Act
are codified at 42 U.S.C. 4001 et seq.
The Reform Act
Amendments to the 68 Act and the 73
Act are set forth in the National Flood
Insurance Reform Act of 1994 (the
Reform Act), Title V of the Riegle
Community Development and
Regulatory Improvement Act of 1994
(Pub. L. 103–325, 108 Stat. 2160).
Several of these amendments require
implementing regulations by the Federal
entities for lending regulation.1
As amended by the Reform Act, the
73 Act directs the Federal entities for
lending regulation (a term defined by
section 3(a)(5) of the 73 Act (42 U.S.C.
4003(a)(5)) to include the OCC, Board,
FDIC, OTS, FCA, and the NCUA) to
issue regulations which direct regulated
lending institutions (a term defined by
section 3(a)(10) of the 73 Act (42 U.S.C.
4003(a)(10)) to include any bank,
savings and loan association, Farm
Credit System institution, and credit
union) which are subject to their
supervision to ensure that any loan
secured by improved real estate or a
mobile home (real property) located or
to be located in a special flood hazard
area is covered for the term of the loan
by flood insurance. Section 102(b) of the
73 Act (42 U.S.C. 4012a(b)).
Standard Flood Hazard Determination
Form
Section 528 of the Reform Act amends
the 68 Act by adding a new section 1365
(42 U.S.C. 4104b). Section 1365(a) of the
68 Act requires the Director of the
FEMA, in consultation with the Federal
entities for lending regulation (among
others), to develop a Standard Flood
Hazard Determination Form for use in
determining whether real property
offered as collateral on a loan is located
in a special flood hazard area. Section
1365(a) states that the standard form
shall be established by FEMA
regulations issued not later than 270
days after the date of enactment of the
Reform Act. The Reform Act was signed
35287Federal Register / Vol. 60, No. 129 / Thursday, July 6, 1995 / Rules and Regulations
into law on September 23, 1994. The
standard form must therefore be
established by the FEMA by no later
than June 20, 1995.
A proposed rulemaking to establish
the standard form was approved for
release for notice and comment by the
FEMA on March 30, 1995. See 60 FR
17758 (April 7, 1995). The public
comment period on the proposed rule
ended on May 8, 1995. The proposed
rule was adopted by the FEMA in final
form on June 20, 1995, and is published
elsewhere in today’s Federal Register.
Section 1365(c) of the 68 Act states
that the Federal entities for lending
regulation must promulgate regulations
which require the use of the standard
form by regulated lending institutions
when determining whether real
property offered as collateral for a loan
is located in a special flood hazard area.
Section 1365(c) further states that a
lender or other person may comply with
this requirement by using the standard
form in a printed, computerized, or
electronic manner.
Section 1365(f) of the 68 Act states
that the regulations requiring use of the
standard form must be issued together
with the FEMA regulation which
establishes the standard form and that
the form will have an effective date of
180 days after the date of issuance of the
regulations. To satisfy this requirement,
this final rule requiring the use of the
standard form is published in the same
issue of the Federal Register as the final
rule of the FEMA which establishes the
standard form.
II. The Final Rule
Notice and comment on the final rule
requiring the use of the standard form
are unnecessary since the rulemaking
merely implements the statutory
requirement that the standard form be
used by regulated lending institutions.
The rulemaking is therefore technical in
nature. The required use of the standard
form is not in need of definition or
interpretation. Moreover, the public has
already had the opportunity to comment
on the substantive content and format of
the standard form, thus fulfilling the
public interest in notice and comment.
The final format and content of the
standard form have been determined
through the related FEMA rulemaking
described above.
The Federal entities for lending
regulation therefore find good cause, in
accordance with section 553(b)(B) of the
Administrative Procedure Act (5 U.S.C.
553(b)(B)), to omit notice and comment
on the rules as unnecessary and to
instead issue final rules which impose
the requirement that the standard form
be used by regulated lending
institutions.
III. Effective Date
The final rule will become effective
January 2, 1996.
IV. Paperwork Reduction Act
As noted previously, it is the
responsibility of the FEMA to establish
the standard form by regulation. The
FEMA has determined that the standard
form constitutes a ‘‘collection of
information’’ as that term is defined in
section 3502(4) of the Paperwork
Reduction Act (the PRA) (44 U.S.C.
3501 et seq.). See 60 FR 17760. The
FEMA has submitted information on the
standard form to the Office of
Management and Budget for review as
required by section 3507 of the PRA (44
U.S.C. 3507). The Director of OMB has
approved the proposed information
collection request of the FEMA, as
required by section 3507.
V. Regulatory Burden
Section 302 of the Riegle Community
Development and Regulatory
Improvement Act (12 U.S.C. 4802)
provides that each Federal banking
agency must consider the administrative
burdens and benefits of any new
regulations that impose additional
requirements on insured depository
institutions. Section 302 also requires
that any regulations which impose
additional reporting, disclosure, or other
requirements on insured depository
institutions shall take effect on the first
day of a calendar quarter which begins
on or after the date on which the
regulations are published in final form.
This requirement need not be observed,
however, if a Federal statute requires
that the regulation take effect on a
different date from the one mandated by
section 302. See section 302(b)(1)(C) (12
U.S.C. 4802(b)(1)(C)).
Requiring the use of the standard form
will be an additional requirement for
depository institutions. Section 528 of
the Reform Act provides, however, that
the standard form be used and the
agencies must implement this statutory
requirement.
Moreover, as noted previously, the
new section 1365(f) of the 68 Act, as
added by section 528 of the Reform Act,
provides that the regulations requiring
the use of the standard form shall be
effective upon the expiration of the 180-
day period beginning on the date of the
regulations’ issuance. Since the 68 Act
requires that the regulations requiring
the use of the standard form take effect
on a different date from the one
mandated by section 302, the exception
in section 302 is operative.
VI. Executive Order 12866
The OCC and the OTS have
determined that this rule is not a
significant regulatory action as defined
in Executive Order 12866.
VII. Unfunded Mandates Act of 1995
The OCC and the OTS have
determined that the requirements of this
final rule will not result in expenditures
by State, local, and tribal governments,
or by the private sector, of more than
$100 million in any one year.
Accordingly, a budgetary impact
statement is not required under section
202 of the Unfunded Mandates Act of
1995.
VIII. NCUA Executive Order 12612
Statement
This rule, like the current part 760 it
is replacing, will apply to all Federally
insured credit unions. The NCUA
Board, pursuant to Executive Order
12612, has determined, however, that
this rule will not have a substantial
direct effect on the states, on the
relationship between the national
government and the states, or on the
distribution of power and
responsibilities among various levels of
government. Further, this rule will not
preempt provisions of state law or
regulations.
List of Subjects
12 CFR Part 22
Flood insurance, Mortgages, National
banks, Reporting and recordkeeping
requirements.
12 CFR Part 208
Accounting, Agriculture, Banks,
banking, Confidential business
information, Crime, Currency, Federal
Reserve System, Flood insurance,
Mortgages, Reporting and recordkeeping
requirements.
12 CFR Part 339
Flood insurance, Reporting and
recordkeeping requirements.
12 CFR Part 563
Accounting, Advertising, Crime,
Currency, Flood insurance, Investments,
Reporting and recordkeeping
requirements, Savings associations,
Securities, Surety bonds.
12 CFR Part 614
Agriculture, Banks, banking, Flood
insurance, Foreign trade, Reporting and
recordkeeping requirements, Rural
areas.
into law on September 23, 1994. The
standard form must therefore be
established by the FEMA by no later
than June 20, 1995.
A proposed rulemaking to establish
the standard form was approved for
release for notice and comment by the
FEMA on March 30, 1995. See 60 FR
17758 (April 7, 1995). The public
comment period on the proposed rule
ended on May 8, 1995. The proposed
rule was adopted by the FEMA in final
form on June 20, 1995, and is published
elsewhere in today’s Federal Register.
Section 1365(c) of the 68 Act states
that the Federal entities for lending
regulation must promulgate regulations
which require the use of the standard
form by regulated lending institutions
when determining whether real
property offered as collateral for a loan
is located in a special flood hazard area.
Section 1365(c) further states that a
lender or other person may comply with
this requirement by using the standard
form in a printed, computerized, or
electronic manner.
Section 1365(f) of the 68 Act states
that the regulations requiring use of the
standard form must be issued together
with the FEMA regulation which
establishes the standard form and that
the form will have an effective date of
180 days after the date of issuance of the
regulations. To satisfy this requirement,
this final rule requiring the use of the
standard form is published in the same
issue of the Federal Register as the final
rule of the FEMA which establishes the
standard form.
II. The Final Rule
Notice and comment on the final rule
requiring the use of the standard form
are unnecessary since the rulemaking
merely implements the statutory
requirement that the standard form be
used by regulated lending institutions.
The rulemaking is therefore technical in
nature. The required use of the standard
form is not in need of definition or
interpretation. Moreover, the public has
already had the opportunity to comment
on the substantive content and format of
the standard form, thus fulfilling the
public interest in notice and comment.
The final format and content of the
standard form have been determined
through the related FEMA rulemaking
described above.
The Federal entities for lending
regulation therefore find good cause, in
accordance with section 553(b)(B) of the
Administrative Procedure Act (5 U.S.C.
553(b)(B)), to omit notice and comment
on the rules as unnecessary and to
instead issue final rules which impose
the requirement that the standard form
be used by regulated lending
institutions.
III. Effective Date
The final rule will become effective
January 2, 1996.
IV. Paperwork Reduction Act
As noted previously, it is the
responsibility of the FEMA to establish
the standard form by regulation. The
FEMA has determined that the standard
form constitutes a ‘‘collection of
information’’ as that term is defined in
section 3502(4) of the Paperwork
Reduction Act (the PRA) (44 U.S.C.
3501 et seq.). See 60 FR 17760. The
FEMA has submitted information on the
standard form to the Office of
Management and Budget for review as
required by section 3507 of the PRA (44
U.S.C. 3507). The Director of OMB has
approved the proposed information
collection request of the FEMA, as
required by section 3507.
V. Regulatory Burden
Section 302 of the Riegle Community
Development and Regulatory
Improvement Act (12 U.S.C. 4802)
provides that each Federal banking
agency must consider the administrative
burdens and benefits of any new
regulations that impose additional
requirements on insured depository
institutions. Section 302 also requires
that any regulations which impose
additional reporting, disclosure, or other
requirements on insured depository
institutions shall take effect on the first
day of a calendar quarter which begins
on or after the date on which the
regulations are published in final form.
This requirement need not be observed,
however, if a Federal statute requires
that the regulation take effect on a
different date from the one mandated by
section 302. See section 302(b)(1)(C) (12
U.S.C. 4802(b)(1)(C)).
Requiring the use of the standard form
will be an additional requirement for
depository institutions. Section 528 of
the Reform Act provides, however, that
the standard form be used and the
agencies must implement this statutory
requirement.
Moreover, as noted previously, the
new section 1365(f) of the 68 Act, as
added by section 528 of the Reform Act,
provides that the regulations requiring
the use of the standard form shall be
effective upon the expiration of the 180-
day period beginning on the date of the
regulations’ issuance. Since the 68 Act
requires that the regulations requiring
the use of the standard form take effect
on a different date from the one
mandated by section 302, the exception
in section 302 is operative.
VI. Executive Order 12866
The OCC and the OTS have
determined that this rule is not a
significant regulatory action as defined
in Executive Order 12866.
VII. Unfunded Mandates Act of 1995
The OCC and the OTS have
determined that the requirements of this
final rule will not result in expenditures
by State, local, and tribal governments,
or by the private sector, of more than
$100 million in any one year.
Accordingly, a budgetary impact
statement is not required under section
202 of the Unfunded Mandates Act of
1995.
VIII. NCUA Executive Order 12612
Statement
This rule, like the current part 760 it
is replacing, will apply to all Federally
insured credit unions. The NCUA
Board, pursuant to Executive Order
12612, has determined, however, that
this rule will not have a substantial
direct effect on the states, on the
relationship between the national
government and the states, or on the
distribution of power and
responsibilities among various levels of
government. Further, this rule will not
preempt provisions of state law or
regulations.
List of Subjects
12 CFR Part 22
Flood insurance, Mortgages, National
banks, Reporting and recordkeeping
requirements.
12 CFR Part 208
Accounting, Agriculture, Banks,
banking, Confidential business
information, Crime, Currency, Federal
Reserve System, Flood insurance,
Mortgages, Reporting and recordkeeping
requirements.
12 CFR Part 339
Flood insurance, Reporting and
recordkeeping requirements.
12 CFR Part 563
Accounting, Advertising, Crime,
Currency, Flood insurance, Investments,
Reporting and recordkeeping
requirements, Savings associations,
Securities, Surety bonds.
12 CFR Part 614
Agriculture, Banks, banking, Flood
insurance, Foreign trade, Reporting and
recordkeeping requirements, Rural
areas.