As you may already know, Congress did not reauthorize the NFIP by the January 19th deadline. This means the Program will experience a hiatus and with the government shutdown, it may be a little longer than expected. This isn’t the first time this has happened and we are confident the program will be reauthorized. That said, when this happens it can be confusing and we want to guide you through the chaos.
With the NFIP being expired, they have no authority to:
- Issue new policies for which application and premium payment dates are on or after January 20, 2018; or,
- Issue increased coverage on existing policies for which endorsement and premium payment dates are on or after January 20, 2018; or,
- Issue renewal policies for which the renewal premium is received by the company on or after January 20, 2018, and after the end of the 30-day renewal grace period, until Congress reauthorizes the Program.
If NFIP insurance isn’t available, what does this mean for you?
- You can close a loan without flood insurance.
The flood insurance rules only require that you purchase an NFIP policy prior to loan closing. You do not need to obtain a private flood insurance policy or delay closing. Be sure to check with your investors; however, as they may have different requirements.
- You still need to pull a Standard Flood Hazard Determination Form and give the Notice of Special Flood Hazard Area, if applicable
- When the NFIP is reauthorized, you will need to notify affected borrowers and begin force placement procedures.
FEMA also recently issued guidance in the event a lapse would occur. You can also refer to the Frequently Asked Questions from when this last occurred back in 2010.
David’s banking career began as a field examiner for the FDIC in 1990. He later became a Compliance Officer and Loan Officer for a small bank. In 1993, he established Banker’s Compliance Consulting. Along with his amazingly talented Team, he has written numerous compliance articles for prestigious banking publications and has developed compliance seminars that Banker’s Compliance Consulting produces.
He is an expert in compliance regulations. He is also a motivational speaker and innovative educator. His quick wit and sense of humor transforms the usually tiring topic of compliance into an enjoyable educational experience. David is on the faculty of the American Bankers Association National Compliance Schools and has served on the faculty of the Center for Financial Training for many years. He also is a frequent speaker at the ABA’s Regulatory Compliance Conference. He is also a trainer for hundreds of webinars, is a Certified Regulatory Compliance Manager (CRCM) and has been a BankersOnline Guru for many years. The American Bankers Association honored David with their Distinguished Service Award in 2016.
David and his wife Karen have three adult children, four grandchildren (none of whom live at home!) and two cats (of which Dave is allergic … the cats, not the children!). They recently moved to an acreage outside of Lincoln, Nebraska where he gets to play with his tractor. When possible David can be found fishing, making sawdust in his shop, or playing the guitar and piano. He also enjoys leading worship at his church.