Flood Disaster Protection Act of 1973 (Pub L 93-234)

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FLOOD DISASTER PROTECTION ACT OF 1973
[Public Law 93–234; 87 Stat. 975; 42 U.S.C. 4002 et seq.]
[As Amended Through P.L. 113–89, Enacted March 21, 2014]
øCurrency: This publication is a compilation of the text of Public Law 93–234. It
was last amended by the public law listed in the As Amended Through note above
and below at the bottom of each page of the pdf version and reflects current law
through the date of the enactment of the public law listed at https://
www.govinfo.gov/app/collection/comps/¿
øNote: While this publication does not represent an official version of any Federal
statute, substantial efforts have been made to ensure the accuracy of its contents.
The official version of Federal law is found in the United States Statutes at Large
and in the United States Code. The legal effect to be given to the Statutes at
Large and the United States Code is established by statute (1 U.S.C. 112, 204).¿

That this Act may be cited as the ‘‘Flood Disaster Protection
Act of 1973’’. ø42 U.S.C. 4001 note¿
FINDINGS AND DECLARATION OF PURPOSE

SEC. 2. ø42 U.S.C. 4002¿ (a) The Congress finds that—
(1) annual losses throughout the Nation from floods and
mudslides are increasing at an alarming rate, largely as a result of the accelerating development of, and concentration of
population in, areas of flood and mudslides hazards;
(2) the availability of Federal loans, grants, guaranties, insurance, and other forms of financial assistance are often determining factors in the utilization of land and the location and
construction of public and of private industrial, commercial,
and residential facilities;
(3) property acquired or constructed with grants or other
Federal assistance may be exposed to risk of loss through
floods, thus frustrating the purpose for which such assistance
was extended;
(4) Federal instrumentalities insure or otherwise provide
financial protection to banking and credit institutions whose
assets include a substantial number of mortgage loans and
other indebtedness secured by property exposed to loss and
damage from floods and mudslides;
(5) the Nation cannot afford the tragic losses of life caused
annually by flood occurrences, nor the increasing losses of
property suffered by flood victims, most of whom are still inadequately compensated despite the provision of costly disaster
relief benefits; and
(6) it is in the public interest for persons already living in
floodprone areas to have both an opportunity to purchase flood
insurance and access to more adequate limits of coverage, so
that they will be indemnified for their losses in the event of future flood disasters.
1
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(b) The purpose of this Act, therefore, is to—
(1) substantially increase the limits of coverage authorized
under the national flood insurance program;
(2) provide for the expeditious identification of, and the
dissemination of information concerning, flood-prone areas;
(3) require States or local communities, as a condition of
future Federal financial assistance, to participate in the flood
insurance program and to adopt adequate flood plain ordinances with effective enforcement provisions consistent with
Federal standards to reduce or avoid future flood losses; and
(4) require the purchase of flood insurance by property
owners who are being assisted by Federal programs or by federally supervised, regulated, or insured agencies or institutions
in the acquisition or improvement of land or facilities located
or to be located in identified areas having special flood hazards.
DEFINITIONS

SEC. 3. ø42 U.S.C. 4003¿ (a) As used in this Act, unless the
context otherwise requires, the term—
(1) ‘‘community’’ means a State or a political subdivision
thereof which has zoning and building code jurisdiction over a
particular area having special flood hazards;
(2) ‘‘Federal agency’’ means any department, agency, corporation, or other entity or instrumentality of the executive
branch of the Federal Government, and includes the Federal
National Mortgage Association and the Federal Home Loan
Mortgage Corporation;
(3) ‘‘financial assistance’’ means any form of loan, grant,
guaranty, insurance, payment, rebate, subsidy, disaster assistance loan or grant, or any other form of direct or indirect Federal assistance, other than general or special revenue sharing
or formula grants made to States;
(4) ‘‘financial assistance for acquisition or construction purposes’’ means any form of financial assistance which is intended in whole or in part for the acquisition, construction, reconstruction, repair, or improvement of any publicly or privately owned building or mobile home, and for any machinery,
equipment fixtures, and furnishings contained or to be contained therein, and shall include the purchase or subsidization
of mortgages or mortgage loans but shall exclude assistance
pursuant to the Disaster Relief and Emergency Assistance
Act 1 (other than assistance under such Act in connection with
a flood);
(5) ‘‘Federal entity for lending regulation’’ means the
Board of Governors of the Federal Reserve System, the Federal
Deposit Insurance Corporation, the Comptroller of the Currency, the National Credit Union Administration, and the
Farm Credit Administration, and with respect to a particular
1 Probably should refer instead to The Robert T. Stafford Disaster Relief and Emergency Assistance Act. See section 102(a) of the Disaster Relief and Emergency Assistance Amendments
of 1988, Pub. L. 100–707.

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regulated lending institution means the entity primarily responsible for the supervision of the institution;
(6) ‘‘Administrator’’ means the Administrator of the Federal Emergency Management Agency;
(7) ‘‘Federal agency lender’’ means a Federal agency that
makes direct loans secured by improved real estate or a mobile
home, to the extent such agency acts in such capacity;
(8) the term ‘‘improved real estate’’ means real estate upon
which a building is located;
(9) ‘‘lender’’ means a regulated lending institution or Federal agency lender;
(10) ‘‘regulated lending institution’’ means any bank, savings and loan association, credit union, farm credit bank, Federal land bank association, production credit association, or
similar institution subject to the supervision of a Federal entity for lending regulation; and
(11) ‘‘servicer’’ means the person responsible for receiving
any scheduled periodic payments from a borrower pursuant to
the terms of a loan, including amounts for taxes, insurance
premiums, and other charges with respect to the property securing the loan, and making the payments of principal and interest and such other payments with respect to the amounts
received from the borrower as may be required pursuant to the
terms of the loan.
(b) The Administrator is authorized to define or redefine, by
rules and regulations, any scientific or technical term used in this
Act, insofar as such definition is not inconsistent with the purposes
of this Act.
TITLE I—EXPANSION OF NATIONAL FLOOD INSURANCE
PROGRAM
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FLOOD INSURANCE PURCHASE AND COMPLIANCE REQUIREMENTS AND
ESCROW ACCOUNTS

SEC. 102. ø42 U.S.C. 4012a¿ (a) After the expiration of sixty
days following the date of enactment of this Act, 2 no Federal officer
or agency shall approve any financial assistance for acquisition or
construction purposes for use in any area that has been identified
by the Administrator as an area having special flood hazards and
in which the sale of flood insurance has been made available under
the National Flood Insurance Act of 1968, unless the building or
mobile home and any personal property to which such financial assistance relates is covered by flood insurance in an amount at least
equal to its development or project cost (less estimated land cost)
or to the maximum limit of coverage made available with respect
to the particular type of property under the National Flood Insurance Act of 1968, whichever is less: Provided, That if the financial
assistance provided is in the form of a loan or an insurance or
guaranty of a loan, the amount of flood insurance required need
not exceed the outstanding principal balance of the loan and need
2 The date of enactment was December 31, 1973.

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not be required beyond the term of the loan. The requirement of
maintaining flood insurance shall apply during the life of the property, regardless of transfer of ownership of such property.
(b) REQUIREMENT FOR MORTGAGE LOANS.—
(1) REGULATED LENDING INSTITUTIONS.—Each Federal entity for lending regulation (after consultation and coordination
with the Financial Institutions Examination Council established under the Federal Financial Institutions Examination
Council Act of 1974) shall by regulation direct regulated lending institutions—
(A) not to make, increase, extend, or renew any loan
secured by improved real estate or a mobile home located
or to be located in an area that has been identified by the
Administrator as an area having special flood hazards and
in which flood insurance has been made available under
the National Flood Insurance Act of 1968, unless the building or mobile home and any personal property securing
such loan is covered for the term of the loan by flood insurance in an amount at least equal to the outstanding principal balance of the loan or the maximum limit of coverage
made available under the Act with respect to the particular type of property, whichever is less; and
(B) to accept private flood insurance as satisfaction of
the flood insurance coverage requirement under subparagraph (A) if the coverage provided by such private flood insurance meets the requirements for coverage under such
subparagraph.
(2) FEDERAL AGENCY LENDERS.—A Federal agency lender
may not make, increase, extend, or renew any loan secured by
improved real estate or a mobile home located or to be located
in an area that has been identified by the Administrator as an
area having special flood hazards and in which flood insurance
has been made available under the National Flood Insurance
Act of 1968, unless the building or mobile home and any personal property securing such loan is covered for the term of the
loan by flood insurance in the amount provided in paragraph
(1)(A). Each Federal agency lender shall accept private flood
insurance as satisfaction of the flood insurance coverage requirement under the preceding sentence if the flood insurance
coverage provided by such private flood insurance meets the
requirements for coverage under such sentence. Each Federal
agency lender shall issue any regulations necessary to carry
out this paragraph. Such regulations shall be consistent with
and substantially identical to the regulations issued under
paragraph (1)(A).
(3) GOVERNMENT-SPONSORED ENTERPRISES FOR HOUSING.—
The Federal National Mortgage Association and the Federal
Home Loan Mortgage Corporation shall implement procedures
reasonably designed to ensure that, for any loan that is—
(A) secured by improved real estate or a mobile home
located in an area that has been identified, at the time of
the origination of the loan or at any time during the term
of the loan, by the Administrator as an area having special
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flood hazards and in which flood insurance is available
under the National Flood Insurance Act of 1968, and
(B) purchased by such entity,
the building or mobile home and any personal property securing the loan is covered for the term of the loan by flood insurance in the amount provided in paragraph (1)(A). The Federal
National Mortgage Association and the Federal Home Loan
Mortgage Corporation shall accept private flood insurance as
satisfaction of the flood insurance coverage requirement under
paragraph (1)(A) if the flood insurance coverage provided by
such private flood insurance meets the requirements for coverage under such paragraph and any requirements established
by the Federal National Mortgage Association or the Federal
Home Loan Mortgage Corporation, respectively, relating to the
financial solvency, strength, or claims-paying ability of private
insurance companies from which the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation will accept private flood insurance.
(4) APPLICABILITY.—
(A) EXISTING COVERAGE.—Except as provided in subparagraph (B), paragraph (1) shall apply on the date of enactment of the Riegle Community Development and Regulatory Improvement Act of 1994. 3
(B) NEW COVERAGE.—Paragraphs (2) and (3) shall
apply only with respect to any loan made, increased, extended, or renewed after the expiration of the 1-year period beginning on the date of enactment of the Riegle Community Development and Regulatory Improvement Act of
1994. 4 Paragraph (1) shall apply with respect to any loan
made, increased, extended, or renewed by any lender supervised by the Farm Credit Administration only after the
expiration of the period under this subparagraph.
(C) CONTINUED EFFECT OF REGULATIONS.—Notwithstanding any other provision of this subsection, the regulations to carry out paragraph (1), as in effect immediately
before the date of enactment of the Riegle Community Development and Regulatory Improvement Act of 1994 4,
shall continue to apply until the regulations issued to
carry out paragraph (1) as amended by section 522(a) of
such Act take effect.
(5) RULE OF CONSTRUCTION.—Nothing in this subsection
shall be construed to supersede or limit the authority of a Federal entity for lending regulation, the Federal Housing Finance
Agency, a Federal agency lender, the Federal National Mortgage Association, or the Federal Home Loan Mortgage Corporation to establish requirements relating to the financial solvency, strength, or claims-paying ability of private insurance
companies from which the entity or agency will accept private
flood insurance.
(6) NOTICE.—
3 September 23, 1994.
4 The date of enactment was September 23, 1994.

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(A) IN GENERAL.—Each lender shall disclose to a borrower that is subject to this subsection that—
(i) flood insurance is available from private insurance companies that issue standard flood insurance
policies on behalf of the national flood insurance program or directly from the national flood insurance program;
(ii) flood insurance that provides the same level of
coverage as a standard flood insurance policy under
the national flood insurance program may be available
from a private insurance company that issues policies
on behalf of the company; and
(iii) the borrower is encouraged to compare the
flood insurance coverage, deductibles, exclusions, conditions and premiums associated with flood insurance
policies issued on behalf of the national flood insurance program and policies issued on behalf of private
insurance companies and to direct inquiries regarding
the availability, cost, and comparisons of flood insurance coverage to an insurance agent.
(B) RULE OF CONSTRUCTION.—Nothing in this paragraph shall be construed as affecting or otherwise limiting
the authority of a Federal entity for lending regulation to
approve any disclosure made by a regulated lending institution for purposes of complying with subparagraph (A).
(7) PRIVATE FLOOD INSURANCE DEFINED.—In this subsection, the term ‘‘private flood insurance’’ means an insurance
policy that—
(A) is issued by an insurance company that is—
(i) licensed, admitted, or otherwise approved to engage in the business of insurance in the State or jurisdiction in which the insured building is located, by the
insurance regulator of that State or jurisdiction; or
(ii) in the case of a policy of difference in conditions, multiple peril, all risk, or other blanket coverage
insuring nonresidential commercial property, is recognized, or not disapproved, as a surplus lines insurer by
the insurance regulator of the State or jurisdiction
where the property to be insured is located;
(B) provides flood insurance coverage which is at least
as broad as the coverage provided under a standard flood
insurance policy under the national flood insurance program, including when considering deductibles, exclusions,
and conditions offered by the insurer;
(C) includes—
(i) a requirement for the insurer to give 45 days’
written notice of cancellation or non-renewal of flood
insurance coverage to—
(I) the insured; and
(II) the regulated lending institution or Federal agency lender;
(ii) information about the availability of flood insurance coverage under the national flood insurance
program;
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(iii) a mortgage interest clause similar to the
clause contained in a standard flood insurance policy
under the national flood insurance program; and
(iv) a provision requiring an insured to file suit
not later than 1 year after date of a written denial of
all or part of a claim under the policy; and
(D) contains cancellation provisions that are as restrictive as the provisions contained in a standard flood insurance policy under the national flood insurance program.
(c) EXCEPTIONS TO PURCHASE REQUIREMENTS.—
(1) STATE-OWNED PROPERTY.—Notwithstanding the other
provisions of this section, flood insurance shall not be required
on any State-owned property that is covered under an adequate State policy of self-insurance satisfactory to the Administrator. The Administrator shall publish and periodically revise
the list of States to which this subsection applies.
(2) SMALL LOANS.—Notwithstanding any other provision of
this section, subsections (a) and (b) shall not apply to any loan
having—
(A) an original outstanding principal balance of $5,000
or less; and
(B) a repayment term of 1 year or less.
(3) DETACHED STRUCTURES.—Notwithstanding any other
provision of this section, flood insurance shall not be required,
in the case of any residential property, for any structure that
is a part of such property but is detached from the primary
residential structure of such property and does not serve as a
residence.
(d) ESCROW OF FLOOD INSURANCE PAYMENTS.—
(1) REGULATED LENDING INSTITUTIONS.—
(A) FEDERAL ENTITIES RESPONSIBLE FOR LENDING REGULATIONS.—Each Federal entity for lending regulation
(after consultation and coordination with the Federal Financial Institutions Examination Council) shall, by regulation, direct that all premiums and fees for flood insurance
under the National Flood Insurance Act of 1968, for residential improved real estate or a mobile home, shall be
paid to the regulated lending institution or servicer for any
loan secured by the residential improved real estate or mobile home, with the same frequency as payments on the
loan are made, for the duration of the loan. Except as provided in subparagraph (B), upon receipt of any premiums
or fees, the regulated lending institution or servicer shall
deposit such premiums and fees in an escrow account on
behalf of the borrower. Upon receipt of a notice from the
Administrator or the provider of the flood insurance that
insurance premiums are due, the premiums deposited in
the escrow account shall be paid to the provider of the
flood insurance.
(B) LIMITATION.—Except as may be required under applicable State law, a Federal entity for lending regulation
may not direct or require a regulated lending institution to
deposit premiums or fees for flood insurance under the NaFebruary 7, 2020

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tional Flood Insurance Act of 1968 in an escrow account on
behalf of a borrower under subparagraph (A)—
(i) if—
(I) the regulated lending institution has total
assets of less than $1,000,000,000; and
(II) on or before the date of enactment of the
Biggert-Waters Flood Insurance Reform Act of
2012, the regulated lending institution—
(aa) in the case of a loan secured by residential improved real estate or a mobile
home, was not required under Federal or
State law to deposit taxes, insurance premiums, fees, or any other charges in an escrow account for the entire term of the loan;
and
(bb) did not have a policy of consistently
and uniformly requiring the deposit of taxes,
insurance premiums, fees, or any other
charges in an escrow account for loans secured by residential improved real estate or a
mobile home; or
(ii) in the case of a loan that—
(I) is in a junior or subordinate position to a
senior lien secured by the same residential improved real estate or mobile home for which flood
insurance is being provided at the time of the
origination of the loan;
(II) is secured by residential improved real estate or a mobile home that is part of a condominium, cooperative, or other project development,
if the residential improved real estate or mobile
home is covered by a flood insurance policy that—
(aa) meets the requirements that the regulated lending institution is required to enforce under subsection (b)(1);
(bb) is provided by the condominium association, cooperative, homeowners association,
or other applicable group; and
(cc) the premium for which is paid by the
condominium association, cooperative, homeowners association, or other applicable group
as a common expense;
(III) is secured by residential improved real
estate or a mobile home that is used as collateral
for a business purpose;
(IV) is a home equity line of credit;
(V) is a nonperforming loan; or
(VI) has a term of not longer than 12 months.
(2) FEDERAL AGENCY LENDERS.—Each Federal agency lender shall by regulation require and provide for escrow and payment of any flood insurance premiums and fees relating to residential improved real estate and mobile homes securing loans
made by the Federal agency lender under the circumstances
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tions issued under this paragraph shall be consistent with and
substantially identical to the regulations issued under paragraph (1).
(3) APPLICABILITY OF RESPA.—Escrow accounts established
pursuant to this subsection shall be subject to the provisions
of section 10 of the Real Estate Settlement Procedures Act of
1974.
(4) DEFINITION.—For purposes of this subsection, the term
‘‘residential improved real estate’’ means improved real estate
for which the improvement is a residential building.
(5) APPLICABILITY.—This subsection shall apply only with
respect to any loan made, increased, extended, or renewed
after the expiration of the 1-year period beginning on the date
of enactment of the Riegle Community Development and Regulatory Improvement Act of 1994. 5
(e) PLACEMENT OF FLOOD INSURANCE BY LENDER.—
(1) NOTIFICATION TO BORROWER OF LACK OF COVERAGE.—
If, at the time of origination or at any time during the term
of a loan secured by improved real estate or by a mobile home
located in an area that has been identified by the Administrator (at the time of the origination of the loan or at any time
during the term of the loan) as an area having special flood
hazards and in which flood insurance is available under the
National Flood Insurance Act of 1968, the lender or servicer for
the loan determines that the building or mobile home and any
personal property securing the loan is not covered by flood insurance or is covered by such insurance in an amount less
than the amount required for the property pursuant to paragraph (1), (2), or (3) of subsection (b), the lender or servicer
shall notify the borrower under the loan that the borrower
should obtain, at the borrower’s expense, an amount of flood
insurance for the building or mobile home and such personal
property that is not less than the amount under subsection
(b)(1), for the term of the loan.
(2) PURCHASE OF COVERAGE ON BEHALF OF BORROWER.—If
the borrower fails to purchase such flood insurance within 45
days after notification under paragraph (1), the lender or
servicer for the loan shall purchase the insurance on behalf of
the borrower and may charge the borrower for the cost of premiums and fees incurred by the lender or servicer for the loan
in purchasing the insurance, including premiums or fees incurred for coverage beginning on the date on which flood insurance coverage lapsed or did not provide a sufficient coverage
amount.
(3) TERMINATION OF FORCE-PLACED INSURANCE.—Within 30
days of receipt by the lender or servicer of a confirmation of
a borrower’s existing flood insurance coverage, the lender or
servicer shall—
(A) terminate any insurance purchased by the lender
or servicer under paragraph (2); and
(B) refund to the borrower all premiums paid by the
borrower for any insurance purchased by the lender or
5 The date of enactment was September 23, 1994.

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servicer under paragraph (2) during any period during
which the borrower’s flood insurance coverage and the insurance coverage purchased by the lender or servicer were
each in effect, and any related fees charged to the borrower with respect to the insurance purchased by the lender or servicer during such period.
(4) SUFFICIENCY OF DEMONSTRATION.—For purposes of confirming a borrower’s existing flood insurance coverage, a lender
or servicer for a loan shall accept from the borrower an insurance policy declarations page that includes the existing flood
insurance policy number and the identity of, and contact information for, the insurance company or agent.
(5) REVIEW OF DETERMINATION REGARDING REQUIRED PURCHASE.—
(A) IN GENERAL.—The borrower and lender for a loan
secured by improved real estate or a mobile home may
jointly request the Administrator to review a determination of whether the building or mobile home is located in
an area having special flood hazards. Such request shall be
supported by technical information relating to the improved real estate or mobile home. Not later than 45 days
after the Administrator receives the request, the Administrator shall review the determination and provide to the
borrower and the lender with a letter stating whether or
not the building or mobile home is in an area having special flood hazards. The determination of the Administrator
shall be final.
(B) EFFECT OF DETERMINATION.—Any person to whom
a borrower provides a letter issued by the Administrator
pursuant to subparagraph (A), stating that the building or
mobile home securing the loan of the borrower is not in an
area having special flood hazards, shall have no obligation
under this title to require the purchase of flood insurance
for such building or mobile home during the period determined by the Administratorwhich shall be specified in the
letter and shall begin on the date on which such letter is
provided.
(C) EFFECT OF FAILURE TO RESPOND.—If a request
under subparagraph (A) is made in connection with the
origination of a loan and the Administrator fails to provide
a letter under subparagraph (A) before the later of (i) the
expiration of the 45-day period under such subparagraph,
or (ii) the closing of the loan, no person shall have an obligation under this title to require the purchase of flood insurance for the building or mobile home securing the loan
until such letter is provided.
(6) APPLICABILITY.—This subsection shall apply to all loans
outstanding on or after the date of enactment of the Riegle
Community Development and Regulatory Improvement Act of
1994. 6
(f) CIVIL MONETARY PENALTIES FOR FAILURE TO REQUIRE
FLOOD INSURANCE OR NOTIFY.—
6 September 23, 1994.

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(1) CIVIL MONETARY PENALTIES AGAINST REGULATED LENDERS.—Any regulated lending institution that is found to have
a pattern or practice of committing violations under paragraph
(2) shall be assessed a civil penalty by the appropriate Federal
entity for lending regulation in the amount provided under
paragraph (5).
(2) LENDER VIOLATIONS.—The violations referred to in
paragraph (1) shall include—
(A) making, increasing, extending, or renewing loans
in violation of—
(i) the regulations issued pursuant to subsection
(b) of this section;
(ii) the escrow requirements under subsection (d)
of this section; or
(iii) the notice requirements under section 1364 of
the National Flood Insurance Act of 1968; or
(B) failure to provide notice or purchase flood insurance coverage in violation of subsection (e) of this section.
(3) CIVIL MONETARY PENALTIES AGAINST GSE’S.—
(A) IN GENERAL.—If the Federal National Mortgage
Association or the Federal Home Loan Mortgage Corporation is found by the Director of the Federal Housing Finance Agency to have a pattern or practice of purchasing
loans in violation of the procedures established pursuant
to subsection (b)(3), the Director of such Office shall assess
a civil penalty against such enterprise in the amount provided under paragraph (5) of this subsection.
(B) DEFINITION.—For purposes of this subsection, the
term ‘‘enterprise’’ means the Federal National Mortgage
Association or the Federal Home Loan Mortgage Corporation.
(4) NOTICE AND HEARING.—A penalty under this subsection
may be issued only after notice and an opportunity for a hearing on the record.
(5) AMOUNT.—A civil monetary penalty under this subsection may not exceed $2,000 for each violation under paragraph (2) or paragraph (3).
(6) LENDER COMPLIANCE.—Notwithstanding any State or
local law, for purposes of this subsection, any regulated lending
institution that purchases flood insurance or renews a contract
for flood insurance on behalf of or as an agent of a borrower
of a loan for which flood insurance is required shall be considered to have complied with the regulations issued under subsection (b).
(7) EFFECT OF TRANSFER ON LIABILITY.—Any sale or other
transfer of a loan by a regulated lending institution that has
committed a violation under paragraph (1), that occurs subsequent to the violation, shall not affect the liability of the transferring lender with respect to any penalty under this subsection. A lender shall not be liable for any violations relating
to a loan committed by another regulated lending institution
that previously held the loan.
(8) DEPOSIT OF PENALTIES.—Any penalties collected under
this subsection shall be paid into the National Flood Mitigation
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Fund under section 1367 of the National Flood Insurance Act
of 1968.
(9) ADDITIONAL PENALTIES.—Any penalty under this subsection shall be in addition to any civil remedy or criminal penalty otherwise available.
(10) STATUTE OF LIMITATIONS.—No penalty may be imposed under this subsection after the expiration of the 4-year
period beginning on the date of the occurrence of the violation
for which the penalty is authorized under this subsection.
(g) OTHER ACTIONS TO REMEDY PATTERN OF NONCOMPLIANCE.—
(1) AUTHORITY OF FEDERAL ENTITIES FOR LENDING REGULATION.—A Federal entity for lending regulation may require a
regulated lending institution to take such remedial actions as
are necessary to ensure that the regulated lending institution
complies with the requirements of the national flood insurance
program if the Federal agency for lending regulation makes a
determination under paragraph (2) regarding the regulated
lending institution.
(2) DETERMINATION OF VIOLATIONS.—A determination
under this paragraph shall be a finding that—
(A) the regulated lending institution has engaged in a
pattern and practice of noncompliance in violation of the
regulations issued pursuant to subsection (b), (d), or (e) or
the notice requirements under section 1364 of the National
Flood Insurance Act of 1968; and
(B) the regulated lending institution has not demonstrated measurable improvement in compliance despite
the assessment of civil monetary penalties under subsection (f).
(h) FEE FOR DETERMINING LOCATION.—Notwithstanding any
other Federal or State law, any person who makes a loan secured
by improved real estate or a mobile home or any servicer for such
a loan may charge a reasonable fee for the costs of determining
whether the building or mobile home securing the loan is located
in an area having special flood hazards, but only in accordance
with the following requirements:
(1) BORROWER FEE.—The borrower under such a loan may
be charged the fee, but only if the determination—
(A) is made pursuant to the making, increasing, extending, or renewing of the loan that is initiated by the
borrower;
(B) is made pursuant to a revision or updating under
section 1360(f) 7 of the floodplain areas and flood-risk zones
or publication of a notice or compendia under subsection
(h) or (i) of section 1360 7 that affects the area in which the
improved real estate or mobile home securing the loan is
located or that, in the determination of the Administrator,
may reasonably be considered to require a determination
under this subsection; or
7 Probably intended to refer to section 1360 of the National Flood Insurance Act of 1968, which
is set forth, post, in this compilation.

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Sec. 201

(C) results in the purchase of flood insurance coverage
pursuant to the requirement under subsection (e)(2).
(2) PURCHASER OR TRANSFEREE FEE.—The purchaser or
transferee of such a loan may be charged the fee in the case
of sale or transfer of the loan.
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TITLE II—DISASTER MITIGATION REQUIREMENTS
NOTIFICATION TO FLOOD-PRONE AREAS

SEC. 201. ø42 U.S.C. 4105¿ (a) Not later than six months following the enactment of this title, the Administrator shall publish
information in accordance with subsection 1360(1) of the National
Flood Insurance Act of 1968, and shall notify the chief executive officer of each known flood-prone community not already participating in the national flood insurance program of its tentative identification as a community containing one or more areas having special flood hazards.
(b) After such notification, each tentatively identified community shall either (1) promptly make proper application to participate in the national flood insurance program or (2) within six
months submit technical data sufficient to establish to the satisfaction of the Administrator that the community either is not seriously flood prone or that such flood hazards as may have existed
have been corrected by floodworks or other flood control methods.
The Administrator may, in his discretion, grant a public hearing to
any community with respect to which conflicting data exist as to
the nature and extent of a flood hazard. If the Administrator decides not to hold a hearing, the community shall be given an opportunity to submit written and documentary evidence. Whether or
not such hearing is granted, the Administrator’s final determination as to the existence or extent of a flood hazard area in a particular community shall be deemed conclusive for the purposes of
this Act if supported by substantial evidence in the record considered as a whole.
(c) As information becomes available to the Administrator, concerning the existence of flood hazards in communities not known
to be flood prone at the time of the initial notification provided for
by subsection (a) of this section he shall provide similar notifications to the chief executive officers of such additional communities,
which shall then be subject to the requirements of subsection (b)
of this section.
(d) Formally identified flood-prone communities that do not
qualify for the national flood insurance program within one year
after such notification or by the date specified in section 202,
whichever is later, shall thereafter be subject to the provisions of
that section relating to flood-prone communities which are not participating in the program.
(e) The Administrator is authorized to establish administrative
procedures whereby the identification under this section of one or
more areas in the community as having special flood hazards may
be appealed to the Administrator by the community or any owner
or lessee of real property within the community who believes his
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property has been inadvertently included in a special flood hazard
area by the identification. When, incident to any appeal under this
subsection, the owner or lessee of real property or the community,
as the case may be, incurs expense in connection with the services
of surveyors, engineers, or similar services, but not including legal
services, in the effecting of an appeal which is successful in whole
or part, the Administrator shall reimburse such individual or community to an extent measured by the ratio of the successful portion
of the appeal as compared to the entire appeal and applying such
ratio to the reasonable value of all such services, but no reimbursement shall be made by the Administrator in respect to any fee or
expense payment, the payment of which was agreed to be contingent upon the result of the appeal. There is authorized to be appropriated for purposes of implementing this subsection not to exceed
$250,000.
EFFECT OF NONPARTICIPATION IN FLOOD INSURANCE PROGRAM

SEC. 202. ø42 U.S.C. 4106¿ (a) No Federal officer or agency
shall approve any financial assistance for acquisition or construction purposes on and after July 1, 1975, for use in any area that
has been identified by the Administrator as an area having special
flood hazards unless the community in which such area is situated
is then participating in the national flood insurance program.
(b) In addition to the requirements of section 1364 of the National Flood Insurance Act of 1968, each Federal entity for lending
regulation shall by regulation require the regulated lending institutions described in such section, and each Federal agency lender
shall issue regulations requiring the Federal agency lender, 8 described in such section to notify (as a condition of making, increasing, extending, or renewing any loan secured by property described
in such section) the purchaser or lessee of such property of whether, in the event of a disaster caused by flood to such property, Federal disaster relief assistance will be available to such property.
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AUTHORITY TO ISSUE REGULATIONS

SEC. 205. ø42 U.S.C. 4128¿ (a) The Administrator is authorized
to issue such regulations as may be necessary to carry out the purpose of this Act.
(b) The head of each Federal agency that administers a program of financial assistance relating to the acquisition, construction, reconstruction, repair, or improvement of publicly or privately
owned land or facilities, and each Federal instrumentality responsible for the supervision, approval, regulation, or insuring of banks,
savings and loan associations, or similar institutions, shall, in cooperation with the Administrator, issue appropriate rules and regulations to govern the carrying out of the agency’s responsibilities
under this Act.
8 So in law.

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Sec. 206

CONSULTATION WITH LOCAL OFFICIALS

SEC. 206. ø42 U.S.C. 4107¿ In carrying out his responsibilities
under the provisions of this title and the National Flood Insurance
Act of 1968 which relate to notification to and identification of
flood-prone areas and the application of criteria for land management and use, including criteria derived from data reflecting new
developments that may indicate the desirability of modifying elevations based on previous flood studies, the Administrator shall establish procedures assuring adequate consultation with the appropriate elected officials of general purpose local governments, including but not limited to those local governments whose prior eligibility under the program has been suspended. Such consultations
shall include, but not be limited to, fully informing local officials at
the commencement of any flood elevation study or investigation undertaken by any agency on behalf of the Administrator concerning
the nature and purpose of the study, the areas involved, the manner in which the study is to be undertaken, the general principles
to be applied, and the use to be made of the data obtained. The Administrator shall encourage local officials to disseminate information concerning such study widely within the community, so that
interested persons will have an opportunity to bring all relevant
facts and technical data concerning the local flood hazard to the attention of the agency during the course of the study.
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