Q: So the question is what is each agency's current policy towards supervised institutions’ acceptance of mutual aid plans?
A: FDIC - Since the final rule was issued, the FDIC has been considering our policy for mutual aid society flood plans. We are still evaluating how we will implement the mutual aid society provision of the final rule.
Federal Reserve - So as the preamble to the final rule recognizes the agencies have had different practices regarding the acceptability of mutual aid plans to satisfy the flood insurance purchase requirement. The analysis of mutual aid plans can be very fact-intensive. So therefore, Federal Reserve staff plan to continue to review these plans on a case-by-case basis.
NCUA - The NCUA must approve any mutual aid society plan. If a credit union wishes to accept a mutual aid society plan under the regulation, the credit union must submit any such plan to the NCUA for approval. The NCUA will evaluate each request based on the regulation's requirements.
OCC - The OCC currently allows a national bank or a federal savings association to accept flood insurance coverage provided by mutual aid societies such as Amish and Mennonite Aid Plans, if the national banks or federal savings associations determine that the flood coverage adequately protects its security for a loan. The Private Flood Insurance Rule maintains the status quo by continuing to allow national banks and federal savings associations to accept flood coverage by mutual aid society plans such as plans issued by the Amish or Mennonites. Since the OCC has already determined that Amish and Mennonite Aid Plans qualify as flood insurance, no further action is needed by the OCC in order for a national bank or a federal savings association to accept such coverage to satisfy the flood insurance purchase requirement. After the Private Flood Insurance Rule takes effect on July 1, a national bank or a federal savings association may accept flood coverage issued by the Amish or Mennonites in accordance with the rule.
Farm Credit Admin. - FCA's intent is to maintain the status quo among the system institutions in accepting mutual aid society plans, in particular Amish Aid. With respect to Amish Aid, we will maintain our policy of allowing system institutions to accept it, and effect compliance with the regulation through examination. We may address this topic further in an Information Memorandum, a Book Letter, or exam guidance, but we have not initiated that particular process yet.
This Q&A was part of the discussion in the Outlook Live – 2019 Interagency Flood Insurance Update on Private Flood Insurance Rule webinar held on 6/18/19 and focused on the new private flood insurance rules that become effective 7/1/19. Information may be found here: https://www.webcaster4.com/Webcast/Page/577/30085