Flood Insurance up for Reauthorization September 2017

As you may recall, the LBA was a very active part of a coalition in 2014 that successfully worked to amended the seriously flawed Biggert-Waters renewal.  The Coalition for Sustainable Flood Insurance, found at http://csfi.info/, is a group of over 700 organizations and individuals from 37 states, with 19 state banker associations.  I will work to get more of those state bankers associations this time.  The Louisiana congressional delegation will be the energy and driving force to get a reauthorization that keeps availability and affordability in the forefront.  I will seek support from the Independent Community Bankers of America and the American Bankers Association for the vision of CSFI.  This is critical for our state  the communities you and your customers live in and the bank. 

A quick word about the heavy rain experienced in many parts of the state this year.  There are two items of note with respect to FDIC.  In a conference call with D.C. FDIC staff they stated that banks may require all their customers to obtain flood insurance whether in or out of a flood hazard zone as defined by NFIP.  The second question we had is whether a bank can have as a policy that bank customers located in a certain area would be required to have flood insurance whether in or out of a flood hazard zone.  Examples would be all properties in Denham Springs, where 90% of all structures flooded in August, would be required to have flood insurance or all properties located within one mile of the Red River in Caddo Parrish would be required to have flood insurance.  This ability would enable the bank to selectively designate areas not in a flood hazard area as requiring flood insurance as a condition of the loan and better protect the customer and the bank based on past or expected flooding.  Fair lending concerns arise if the selection is done on an individual customer basis.  Commissioner Ducrest is assisting us with FDIC staff in D.C. to get a written opinion that could be helpful to you. 

LBA has a resources page related to the recent flooding event that may be helpful to banks and their customers.  Click here to view the updated page.