National Flood Insurance Reform Act of 1994.

RIEGLE COMMUNITY DEVELOPMENT ACT

Subtitle B - Compliance and Increased Participation

523. Escrow of Flood Insurance Payments

Section 102 of the Flood Disaster Protection Act of 1973 (42 U.S.C. 4012a) is amended by adding at the end the following new subsection:

“(d) ESCROW OF FLOOD INSURANCE PAYMENTS.-

“(1) REGULATED LENDING INSTITUTIONS.-- Each Federal entity for lending regulation (after consultation and coordination [2259] with the Financial Institutions Examination Council) shall by regulation require that, if a regulated lending institution requires the escrowin8g of taxes, insurance premiums, fees, or any other charges for a loan secured by residential improved real estate or a mobile home, then all premiums and fees for flood insurance under the National Flood Insurance Act of 1968 for the real estate or mobile home shall be paid to the regulated lending institution or other servicer for the loan in a manner sufficient to make payments as due for the duration of the loan. Upon receipt of the premiums, the regulated lending institution or servicer of the loan shall deposit the premiums in an escrow account on behalf of the borrower. Upon receipt of a notice from the Director or the provider of the insurance that insurance premiums are due, the regulated lending institution or servicer shall pay from the escrow account to the provider of the insurance the amount of insurance premiums owed.

“(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 and in the manner provided under paragraph (1). Any regulations 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.”.