12 CFR Ch. I (1–1–13 Edition) § 22.10

§ 22.10 12 CFR Ch. I (1–1–13 Edition)

(e) Alternate method of notice. Instead APPENDIX A TO PART 22—SAMPLE FORM of providing the notice to the borrower OF NOTICE OF SPECIAL FLOOD HAZ- required by paragraph (a) of this sec- ARDS AND AVAILABILITY OF FEDERAL tion, a bank may obtain satisfactory DISASTER RELIEF ASSISTANCE written assurance from a seller or les- We are giving you this notice to inform sor that, within a reasonable time be- you that: fore the completion of the sale or lease The building or mobile home securing the transaction, the seller or lessor has loan for which you have applied is or will be provided such notice to the purchaser located in an area with special flood hazards. or lessee. The bank shall retain a The area has been identified by the Direc- record of the written assurance from tor of the Federal Emergency Management Agency (FEMA) as a special flood hazard the seller or lessor for the period of area using FEMA’s Flood Insurance Rate Map time the bank owns the loan. or the Flood Hazard Boundary Map for the (f) Use of prescribed form of notice. A following community: llllllll. This bank will be considered to be in com- area has at least a one percent (1%) chance pliance with the requirement for notice of a flood equal to or exceeding the base to the borrower of this section by pro- flood elevation (a 100-year flood) in any given year. During the life of a 30-year mort- viding written notice to the borrower gage loan, the risk of a 100-year flood in a containing the language presented in special flood hazard area is 26 percent (26%). appendix A to this part within a rea- Federal law allows a lender and borrower sonable time before the completion of jointly to request the Director of FEMA to the transaction. The notice presented review the determination of whether the in appendix A to this part satisfies the property securing the loan is located in a special flood hazard area. If you would like borrower notice requirements of the to make such a request, please contact us for Act. further information. lll The community in which the prop- § 22.10 Notice of servicer’s identity. erty securing the loan is located participates (a) Notice requirement. When a bank in the National Flood Insurance Program (NFIP). Federal law will not allow us to makes, increases, extends, renews, make you the loan that you have applied for sells, or transfers a loan secured by a if you do not purchase flood insurance. The building or mobile home located or to flood insurance must be maintained for the be located in a special flood hazard life of the loan. If you fail to purchase or area, the bank shall notify the Director renew flood insurance on the property, Fed- of FEMA (or the Director’s designee) in eral law authorizes and requires us to purchase the flood insurance for you at your ex- writing of the identity of the servicer pense. of the loan. The Director of FEMA has • Flood insurance coverage under the NFIP designated the insurance provider to may be purchased through an insurance receive the bank’s notice of the agent who will obtain the policy either di- servicer’s identity. This notice may be rectly through the NFIP or through an in- provided electronically if electronic surance company that participates in the NFIP. Flood insurance also may be available transmission is satisfactory to the Di- from private insurers that do not participate rector of FEMA’s designee. in the NFIP. (b) Transfer of servicing rights. The • At a minimum, flood insurance pur- bank shall notify the Director of chased must cover the lesser of: FEMA (or the Director’s designee) of (1) the outstanding principal balance of the any change in the servicer of a loan de- loan; or scribed in paragraph (a) of this section (2) the maximum amount of coverage al- lowed for the type of property under the within 60 days after the effective date NFIP. of the change. This notice may be pro- Flood insurance coverage under the NFIP vided electronically if electronic trans- is limited to the overall value of the prop- mission is satisfactory to the Director erty securing the loan minus the value of the of FEMA’s designee. Upon any change land on which the property is located. in the servicing of a loan described in • Federal disaster relief assistance (usu- ally in the form of a low-interest loan) may paragraph (a) of this section, the duty be available for damages incurred in excess to provide notice under this paragraph of your flood insurance if your community’s (b) shall transfer to the transferee participation in the NFIP is in accordance servicer. with NFIP requirements.

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VerDate Mar<15>2010 22:16 Jan 23, 2013 Jkt 229035 PO 00000 Frm 00328 Fmt 8010 Sfmt 8002 Q:\12\12V1.TXT ofr150 PsN: PC150 Comptroller of the Currency, Treasury § 23.2

lll Flood insurance coverage under the § 23.2 Definitions. NFIP is not available for the property securing the loan because the community in (a) Affiliate means an affiliate as de- which the property is located does not par- scribed in § 23.6. ticipate in the NFIP. In addition, if the non- (b) Capital and surplus means: participating community has been identified (1) A bank’s Tier 1 and Tier 2 capital for at least one year as containing a special calculated under the OCC’s risk-based flood hazard area, properties located in the capital standards set forth in appendix community will not be eligible for Federal A to 12 CFR part 3 as reported in the disaster relief assistance in the event of a bank’s Consolidated Report of Condi- Federally-declared flood disaster. tion and Income filed under 12 U.S.C. [61 FR 45702, Aug. 29, 1996] 161; plus (2) The balance of a bank’s allowance PART 23—LEASING for loan and lease losses not included in the bank’s Tier 2 capital, for pur- Subpart A—General Provisions poses of the calculation of risk-based capital described in paragraph (b)(1) of Sec. this section, as reported in the bank’s 23.1 Authority, purpose, and scope. Consolidated Report of Condition and 23.2 Definitions. Income filed under 12 U.S.C. 161. 23.3 Lease requirements. (c) CEBA Lease means a personal 23.4 Investment in personal property. property lease authorized under 12 23.5 Requirement for separate records. U.S.C. 24(Tenth). 23.6 Application of lending limits; restric- (d) Conforming lease means: tions on transactions with affiliates. (1) A CEBA Lease that conforms with the requirements of subparts A and B Subpart B—CEBA Leases of this part; or 23.10 General rule. (2) A Section 24(Seventh) Lease that 23.11 Lease term. conforms with the requirements of sub- 23.12 Transition rule. parts A and C of this part. (e) Full-payout lease means a lease in Subpart C—Section 24(Seventh) Leases which the national bank reasonably ex- pects to realize the return of its full in- 23.20 General rule. vestment in the leased property, plus 23.21 Estimated residual value. the estimated cost of financing the 23.22 Transition rule. property over the term of the lease, AUTHORITY: 12 U.S.C. 1 et seq., 24(Seventh), from: 24(Tenth), and 93a. (1) Rentals; SOURCE: 61 FR 66560, Dec. 18, 1996, unless (2) Estimated tax benefits; and otherwise noted. (3) The estimated residual value of the property at the expiration of the Subpart A—General Provisions lease term. (f) Net lease means a lease under § 23.1 Authority, purpose, and scope. which the national bank will not, di- rectly or indirectly, provide or be obli- (a) Authority. A national bank may gated to provide for: engage in personal property lease fi- (1) Servicing, repair, or maintenance nancing transactions pursuant to 12 of the leased property during the lease U.S.C. 24(Seventh) or 12 U.S.C. term; 24(Tenth). (2) Parts or accessories for the leased (b) Purpose. The purpose of this part property; is to set forth standards for personal (3) Loan of replacement or substitute property lease financing transactions property while the leased property is authorized for national banks. being serviced; (c) Scope. This part applies to the ac- (4) Payment of insurance for the les- quisition of personal property by a na- see, except where the lessee has failed tional bank for the purpose of, or in in its contractual obligation to pur- connection with, the leasing of that chase or maintain required insurance; property. or

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