99-32687. Loans in Areas Having Special Flood Hazards

[Federal Register Volume 64, Number 244 (Tuesday, December 21, 1999)]
[Rules and Regulations]
[Pages 71272-71275]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-32687]



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DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency

12 CFR Part 22

[Docket No. 99-19]
RIN 1557-AB74

FEDERAL RESERVE SYSTEM

12 CFR Part 208

[Regulation H; Docket No. 10-52]

FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Part 339

RIN 3064-AC24

FARM CREDIT ADMINISTRATION

12 CFR Part 614

RIN 3052-AB89

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); Farm Credit Administration (FCA); 
and National Credit Union Administration (NCUA) (collectively, the 
Agencies).

ACTION: Joint final rule.

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SUMMARY: The Agencies jointly are making technical amendments to their 
regulations on loans in areas having special flood hazards. This action 
removes an outdated cross-reference to Federal Emergency Management 
Agency (FEMA) regulations that had contained the text of the Standard 
Flood Hazard Determination Form (Form). This action is intended to 
update and make accurate the Agencies' regulations regarding loans in 
areas having special flood hazards.

EFFECTIVE DATE: December 21, 1999.

FOR FURTHER INFORMATION CONTACT:
    OCC: Carol Workman, Compliance Specialist, Community and Consumer 
Policy, [phone]; Margaret Hesse, Senior Attorney, Community and 
Consumer Law Division, [phone]; or Jacqueline L. Lussier, Senior 
Attorney, Legislative and Regulatory Activities Division, Office of 
Chief Counsel, [phone], Office of the Comptroller of the 
Currency, 250 E Street, SW, Washington, DC 20219.
    Board: Kathleen C. Ryan, Attorney, Division of Consumer & Community 
Affairs [phone]; Michael O'Rourke, Counsel, Legal Division, 
[phone], Board of Governors of the Federal Reserve System, 20th 
Street and Constitution Avenue, NW, Washington, DC 20551.
    FDIC: Ken Baebel, Senior Review Examiner, Division of Compliance 
and Consumer Affairs, [phone]; Mark Mellon, Counsel, Regulation 
and Legislation Section, Legal Division, [phone]; or Nancy 
Schucker Recchia, Counsel, Regulation and Legislation Section, Legal 
Division, [phone], Federal Deposit Insurance Corporation, 550 
17th Street, NW, Washington, DC 20429.
    FCA: Tong-Ching Chang, Policy Analyst, Office of Policy and 
Analysis, [phone]; or Wendy R. Laguarda, Senior Counsel, Office 
of General Counsel, [phone], Farm Credit Administration, 1501 
Farm Credit Drive, McLean, VA 22102-5090. TDD [phone].
    NCUA: Kimberly Iverson, Program Officer, [phone]; or 
Chrisanthy J. Loizos, Staff Attorney, Division of Operations, Office of 
General Counsel, [phone], National Credit Union Administration, 
1775 Duke Street, Alexandria, VA 22314-3428.

SUPPLEMENTARY INFORMATION:

I. Background and Discussion of Final Rule

    As required by federal law, FEMA established the Form for 
determining whether a building or mobile home offered as collateral 
security for a loan is or will be located in a special flood hazard 
area, whether flood insurance is required, and whether federal flood 
insurance is available. 42 U.S.C. 4104b. On July 6, 1995, FEMA 
published a final rule that included the text of the Form at 44 CFR 
part 65 (Appendix A). 60 FR 35276. The Agencies published a joint final 
rule on the same date requiring lending institutions supervised by the 
Agencies (regulated lenders) to use the Form. 60 FR 35286. On August 
29, 1996, the Agencies published a joint final rule that revised their 
respective flood insurance regulations. 61 FR 45684. This joint final 
rule also required regulated lenders to use the Form. The Agencies' 
regulations cross-referenced 44 CFR part 65 (Appendix A).
    On May 21, 1998, FEMA published a final rule that removed 44 CFR 
part 65 (Appendix A). 63 FR 27856. FEMA removed Appendix A to enhance 
its ability to incorporate changes to the Form outside of the 
rulemaking process, while continuing to provide full notice of the 
availability of the Form to the public and to affected parties. Id.
    Because FEMA removed 44 CFR part 65 (Appendix A), it is necessary 
for the Agencies to make conforming changes to their regulations.\1\ 
This joint final rule removes the cross-reference in the Agencies' 
respective flood insurance regulations to 44 CFR part 65 (Appendix A) 
and replaces it with a statement that the Form is available from FEMA. 
The Agencies are making substantively similar technical clarifying 
changes to their regulations.
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    \1\ The Office of Thrift Supervision published this change 
separately. See 64 FR 69183, 69185 (December 10, 1999).
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    Regulated lenders still must use the Form for determining whether a 
building or mobile home offered as collateral security for a loan is or 
will be located in a special flood hazard area, whether flood insurance 
is required, and whether federal flood insurance is available. 
Regulated lenders may obtain the Form from FEMA through the mail by 
writing to FEMA Distribution Facility, P.O. Box 2012, Jessup, MD 20794-
2012; by telephone at [phone]; or from FEMA's Internet website 
at http://www.fema.gov/library/sfldfrm.pdf>.

II. Notice and Comment

    This joint final rule makes only technical amendments removing an 
outdated cross-reference to another agency's regulations and, in some 
instances, adding information on the Form's availability. It makes no 
substantive changes to the Agencies' regulations. The Agencies 
therefore for good cause find that notice and public comment are 
unnecessary under section 553(b)(B) of the Administrative Procedure Act 
(APA) (5 U.S.C. 553(b)(B)).

III. Effective Date

    Subject to certain exceptions, 12 U.S.C. 4802(b)(1) provides that 
new regulations and amendments to regulations prescribed by a federal 
banking agency that impose additional reporting, disclosures, or other 
new requirements on an insured depository institution must take effect 
on the first day of a calendar quarter that begins on or after the date 
on which the regulations are published in final form. This joint final 
rule is not subject to this delayed effective date requirement because 
it imposes no new requirements. It simply makes technical amendments. 
The Form is available from FEMA and regulated lenders will not need any 
additional time to adjust

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their policies or practices in order to comply with this joint final 
rule.
    The Agencies also find good cause to dispense with the 30-day 
delayed effective date requirement under section 553(d) of the APA (5 
U.S.C. 553(d)). Section 553(d) of the APA provides, subject to certain 
exceptions, that publication of a final rule must be made not less than 
30 days before its effective date (5 U.S.C. 553(d)). A rulemaking is 
excepted from this requirement where an agency finds good cause for an 
earlier effective date and publishes such finding with rule (5 U.S.C. 
553(d)(3)). As noted previously this joint final rule makes only 
technical amendments to remove an outdated cross-reference to another 
agency's regulations and, in some instances, adds information on the 
Form's availability. It makes no substantive changes to the Agencies' 
regulations. Accordingly, the Agencies find good cause to dispense with 
the delayed effective date requirements and to make this joint final 
rule effective upon publication in the Federal Register.

IV. Paperwork Reduction Act

    The Agencies have determined that this joint final rulemaking does 
not contain or modify a collection of information pursuant to the 
Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.).

V. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612) does not 
apply to a rulemaking where a general notice of proposed rulemaking is 
not required. 5 U.S.C. 603 and 604. As noted previously, the Agencies 
have determined that it is not necessary to publish a notice of 
proposed rulemaking for this joint final rule. Accordingly, the RFA's 
requirements relating to an initial and final regulatory flexibility 
analysis are not applicable. Moreover, since this joint final rule 
imposes no new requirements and makes only technical amendments, this 
joint final rule will not have a significant economic impact on a 
substantial number of small entities.

VI. Small Business Regulatory Enforcement Fairness Act

    The Congressional review provisions of the Small Business 
Regulatory Enforcement Fairness Act of 1996 (SBREFA) (5 U.S.C. 801-808) 
provide generally for agencies to report final rules to Congress and 
the General Accounting Office (GAO) for review before the rules may 
take effect. The reporting requirement is triggered when a federal 
agency issues a final rule. The Agencies will submit the appropriate 
reports to Congress and the GAO as required by SBREFA.
    The Office of Management and Budget has found that this joint final 
rule does not constitute a ``major rule'' as defined by SBREFA.

VII. Executive Order 12866

    OCC: The OCC has determined that its portion of this joint final 
rule is not a significant regulatory action as defined in Executive 
Order 12866.

VIII. Unfunded Mandates Act of 1995

    OCC: The Unfunded Mandates Reform Act of 1995, Pub. L. 104-4, 109 
Stat. 48 (UMA), applies only when an agency is required to issue a 
general notice of proposed rulemaking or a final rule for which the 
agency published a general notice of proposed rulemaking (2 U.S.C. 
1532). As noted previously, the Agencies have determined, for good 
cause, that notice and comment is unnecessary. Accordingly, the UMA 
does not require a budgetary impact analysis.
    Nevertheless, the OCC has determined that its portion of this joint 
final rule will not result in expenditures by state, local, and tribal 
governments, or by the private sector, of $100 million or more in any 
one year. Accordingly the OCC has not prepared a budgetary impact 
statement or specifically addressed the regulatory alternatives 
considered.

IX. Executive Order 13132 Statement

    OCC: The OCC has determined that its portion of this joint final 
rule does not constitute a policy that has federalism implications for 
purposes of Executive Order 13132.
    NCUA: Executive Order 13132 encourages independent regulatory 
agencies to consider the impact of their regulatory actions on state 
and local interests. In adherence to fundamental federalism principles, 
NCUA, an independent regulatory agency as defined in 44 U.S.C. 3502(5), 
voluntarily complies with the executive order. NCUA's portion of this 
joint final rule will apply to all federally insured credit unions, but 
it will not have substantial direct effects on the states, on the 
relationship between the national government and the states, or on the 
distribution of power and responsibilities among the various levels of 
government. NCUA has determined that its portion of this joint final 
rule does not constitute a policy that has federalism implications for 
purposes of the executive order.

X. Assessment of Impact of Federal Regulation on Families

    The Agencies have determined that this joint final rule will not 
affect family well-being within the meaning of section 654 of the 
Treasury Department Appropriations Act, 1999, enacted as part of the 
Omnibus Consolidated and Emergency Supplemental Appropriations Act, 
1999, Pub. L. 105-277, 112 Stat. 2681.

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 614

    Agriculture, Banks, banking, Flood insurance, Foreign trade, 
Reporting and recordkeeping requirements, Rural areas.

12 CFR Part 760

    Credit unions, Mortgages, Flood insurance, Reporting and 
recordkeeping requirements.

Office of the Comptroller of the Currency

12 CFR CHAPTER I

Authority and Issuance

    For the reasons set forth in the joint preamble, the OCC amends 
part 22 of chapter I of title 12 of the Code of Federal Regulations as 
set forth below:

PART 22--LOANS IN AREAS HAVING SPECIAL FLOOD HAZARDS

    1. The authority citation for part 22 continues to read as follows:

    Authority: 12 U.S.C. 93a; 42 U.S.C. 4012a, 4104a, 4104b, 4106, 
and 4128.

    2. In Sec. 22.6, paragraph (a) is revised to read as follows:


Sec. 22.6  Required use of standard flood hazard determination form.

    (a) Use of form. A bank shall use the standard flood hazard 
determination form developed by the Director of FEMA when determining 
whether the building or mobile home offered as collateral security for 
a loan is or will

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be located in a special flood hazard area in which flood insurance is 
available under the Act. The standard flood hazard determination form 
may be used in a printed, computerized, or electronic manner. A bank 
may obtain the standard flood hazard determination form from FEMA, P.O. 
Box 2012, Jessup, MD 20794-2012.
* * * * *
    Dated: December 9, 1999.
John D. Hawke, Jr.,
Comptroller of the Currency.

Federal Reserve System

12 CFR CHAPTER II

Authority and Issuance

    For the reasons set forth in the joint preamble, the Board amends 
part 208 of chapter II of title 12 of the Code of Federal Regulations 
as set forth below:

PART 208--MEMBERSHIP OF STATE BANKING INSTITUTIONS IN THE FEDERAL 
RESERVE SYSTEM (REGULATION H)

    1. The authority citation for part 208 continues to read as 
follows:

    Authority: (12 U.S.C. 24, 36, 92(a), 93(a), 248(a), 248(c) 321-
338a,371d, 461, 481-486, 601, 611, 1814, 1816, 1818, 1820(d)(9), 
1823(j), 1828(o), 1831, 1831o, 1831p-1, 1831r-1, 1835a, 1882, 2901-
2907, 3105, 3310, 3331-3351, and 3906-3909, 15 U.S.C. 78b, 781(b), 
781(g), 781(i), 78o-4(c)(5), 78q, 78q-1, and 78w; 31 U.S.C. 5318; 42 
U.S.C. 4012a, 4104a, 4104b, 4106, and 4128.

    2. In Sec. 208.25, paragraph (f)(1) is revised to read as follows:


Sec. 208.25  Loans in areas having special flood hazards.

* * * * *
    (f) Required use of standard flood hazard determination form. (1) 
use of form. A member bank shall use the standard flood hazard 
determination form developed by the Director of FEMA when determining 
whether the building or mobile home offered as collateral security for 
a loan is or will be located in a special flood hazard area in which 
flood insurance is available under the Act. The standard flood hazard 
determination form may be used in a printed, computerized, or 
electronic manner. A member bank may obtain the standard flood hazard 
determination form by written request to FEMA, P.O. Box 2012, Jessup, 
MD 20794-2012.
* * * * *
    By order of the Board of Governors of the Federal Reserve 
System, December 10, 1999.
Jennifer J. Johnson,
Secretary of the Board.

Federal Deposit Insurance Corporation

12 CFR CHAPTER III

Authority and Issuance

    For the reasons set forth in the joint preamble, the Board of 
Directors of the FDIC amends part 339 of chapter III of title 12 of the 
Code of Federal Regulations as set forth below:

PART 339--LOANS IN AREAS HAVING SPECIAL FLOOD HAZARDS

    1. The authority citation for part 339 continues to read as 
follows:

    Authority: 42 U.S.C. 4012a, 4104a, 4104b, 4106, and 4128.

    2. In Sec. 339.6, paragraph (a) is revised to read as follows:


Sec. 339.6  Required use of standard flood hazard determination form.

    (a) Use of form. A bank shall use the standard flood hazard 
determination form developed by the Director of FEMA when determining 
whether the building or mobile home offered as collateral security for 
a loan is or will be located in a special flood hazard area in which 
flood insurance is available under the Act. The standard flood hazard 
determination form may be used in a printed, computerized, or 
electronic manner. A non-member bank may obtain the standard flood 
hazard determination form by written request to FEMA, P.O. Box 2012, 
Jessup, MD 20794-2012.
* * * * *
    By order of the Board of Directors.

    Dated at Washington, DC, this 6th day of December 1999.

Federal Deposit Insurance Corporation
Robert E. Feldman,
Executive Secretary.

Farm Credit Administration

12 CFR Chapter VI

Authority and Issuance

    For the reasons stated in the joint preamble, the Board amends part 
614 of chapter VI of title 12 of the Code of Federal Regulations as set 
forth below.

PART 614--LOAN POLICIES AND OPERATIONS

    1. The authority citation for part 614 continues to read as 
follows:

    Authority: 42 U.S.C. 4012a, 4104a, 4104b, 4106, and 4128; secs. 
1.3, 1.5, 1.6, 1.7, 1.9, 1.10, 1.11, 2.0, 2.2, 2.3, 2.4, 2.10, 2.12, 
2.13, 2.15, 3.0, 3.1, 3.3, 3.7, 3.8, 3.10, 3.20, 3.28, 4.3A, 4.12, 
4.12A, 4.13, 413B, 4.14, 4.14A, 4.14C, 4.14D, 4.14E, 4.18, 4.18A, 
4.19, 4.36, 4.37, 5.9, 5.10, 5.17, 7.0, 7.2, 7.6, 7.7, 7.8, 7.12, 
7.13, 8.0, 8.5, 8.9 of the Farm Credit Act (12 U.S.C. 2011, 2013, 
2014, 2015, 2017, 2018, 2019, 2071, 2073, 2074, 2075, 2091, 2093, 
2094, 2096, 2121, 2122, 2124, 2128, 2129, 2131, 2141, 2149, 2154a, 
2183, 2184, 2199, 2201, 2202, 2202a, 2202c, 2202d, 2202e, 2206, 
2206a, 2207, 2219a, 2219b, 2243, 2244, 2252, 2279a, 2279a-2, 2279b, 
2279b-1, 2279b-2, 2279f, 2279f-1, 2279aa, 2279aa-5, 2279aa-9); sec. 
413 of Pub. L. 100-233, 101 Stat. 1568, 1639.

    2. In Sec. 614.4940, paragraph (a) is revised to read as follows:


Sec. 614.4940  Required use of standard flood hazard determination 
form.

    (a) Use of form. System institutions must use the standard flood 
hazard determination form developed by the Director of FEMA when 
determining whether the building or mobile home offered as collateral 
security for a loan is or will be located in a special flood hazard 
area in which flood insurance is available under the 1968 Act. The 
standard flood hazard determination form may be used in a printed, 
computerized, or electronic manner. A System institution may obtain the 
standard flood hazard determination form by written request to FEMA, 
P.O. Box 2012, Jessup, MD 20794-2012.
* * * * *
    Dated: December 8, 1999.
Vivian L. Portis,
Secretary, Farm Credit Administration Board.

National Credit Union Administration

12 CFR CHAPTER VII

Authority and Issuance

    For the reasons set forth in the joint preamble, the NCUA amends 
part 760 of chapter VII of title 12 of the Code of Federal Regulations 
as set forth below.

PART 760--LOANS IN AREAS HAVING SPECIAL FLOOD HAZARDS

    1. The authority citation for part 760 continues to read as 
follows:

    Authority: 12 U.S.C. 1757, 1789; 42 U.S.C. 4012a, 4104a, 4104b, 
4106, and 4128.

    2. In Sec. 760.6, paragraph (a) is revised to read as follows:


Sec. 760.6  Required use of standard flood hazard determination form.

    (a) Use of form. A credit union shall use the standard flood hazard 
determination form developed by the Director when determining whether 
the building or mobile home offered as collateral security for a loan 
is or will be located in a special flood hazard area in which flood 
insurance is available under the Act. The standard flood hazard 
determination form may be used

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in a printed, computerized, or electronic manner. A credit union may 
obtain the standard flood hazard determination form from FEMA, P.O. Box 
2012, Jessup, MD 20794-2012.
* * * * *
    By the National Credit Union Administration Board on November 
30, 1999.
Becky Baker,
Secretary of the Board.
[FR Doc. 99-32687 Filed 12-20-99; 8:45 am]
BILLING CODE 4810-33-M; 6210-01-M; 6714-01-M; 6705-01-M; 7535-01-M