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Senate passes Flood Insurance fixes
WASHINGTON (3/14/14)--The Homeowner Flood Insurance Affordability Act (H.R. 3370) can now move on to President Barack Obama's desk to be signed into law after the Senate approved the bill on Thursday.
 
The Senate approved the bill on a 72-22 vote. The bill passed the House earlier this month by a 306-91 vote.
 
The bill, in part, would delay planned increases in National Flood Insurance Program (NFIP) premiums until the Federal Emergency Management Agency puts in place a plan to ensure they are implemented affordably.
 
A range of other NFIP fixes has been discussed in recent months. The National Credit Union Administration joined the Federal Reserve, the Farm Credit Administration, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency to ask whether federal financial regulatory agencies should adopt additional regulations on the acceptance of flood insurance policies issued by private insurers.
 
The joint agency proposal would:
  • Require regulated lending institutions to escrow payments and fees for flood insurance for any new or outstanding loans secured by residential improved real estate or a mobile home, not including business, agricultural and commercial loans, unless the institutions qualify for a statutory exception;
  • Result in new and revised sample notice forms and clauses concerning the availability of private flood insurance coverage and the escrow requirement;
  • Clarify that regulated lending institutions have the authority to charge a borrower for the cost of force-placed flood insurance coverage after a homeowner's private insurance lapses or becomes insufficient; and
  • Outline the circumstances under which a lender must terminate force-placed flood insurance coverage and refund payments to a borrower.
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