Flood insurance regulatory requirements continue to change. On July 21, 2015 the Federal Deposit Insurance Corporation (FDIC), Office of the Comptroller of the Currency (OCC), Federal Reserve Board (FRB), National Credit Union Administration (NCUA) and Farm Credit Administration (FCA) issued a joint final rule to amend their respective regulations regarding loans in special flood hazard areas that amends the agencies’ regulations for loans in areas having special flood hazards. Our latest Point of View provides financial institution compliance leaders with analysis and recommendations regarding several immediate actions they can take to enhance their compliance effectiveness and efficiency while simultaneously increasing organizational agility.
Between 1968 and 2014, the national flood insurance regulatory framework has expanded steadily. Financial institutions continue to struggle with regulatory flood insurance requirements related to the most recent reforms in 2012 and 2014. Many business processes are manual and may lack the appropriate level of controls, monitoring, reporting, and recordkeeping.
These deficiencies increasingly generate regulatory attention as banking supervision and exam activity continues to increase attention to federal flood insurance policy. Increased flood examinations (including follow-ups) are anticipated throughout 2017 and 2018. Banks are experiencing a surge in enforcement actions, civil money penalties and supervisory attention. They are also seeing an uptick in Matters Requiring Immediate Attention (MRIAs) and Matters Requiring Attention (MRAs) regarding flood insurance issues.