[Code of Federal Regulations]

[Title 12, Volume 6]

[Revised as of January 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 12CFR760.9]



[Page 682]

 

                       TITLE 12--BANKS AND BANKING

 

            CHAPTER VII--NATIONAL CREDIT UNION ADMINISTRATION

 

PART 760_LOANS IN AREAS HAVING SPECIAL FLOOD HAZARDS--Table of Contents

 

Sec. 760.9  Notice of special flood hazards and availability of Federal 

disaster relief assistance.



    (a) Notice requirement. When a credit union makes, increases, 

extends, or renews a loan secured by a building or a mobile home located 

or to be located in a special flood hazard area, the credit union shall 

mail or deliver a written notice to the borrower and to the servicer in 

all cases whether or not flood insurance is available under the Act for 

the collateral securing the loan.

    (b) Contents of notice. The written notice must include the 

following information:

    (1) A warning, in a form approved by the Director of FEMA, that the 

building or the mobile home is or will be located in a special flood 

hazard area;

    (2) A description of the flood insurance purchase requirements set 

forth in section 102(b) of the Flood Disaster Protection Act of 1973, as 

amended (42 U.S.C. 4012a(b));

    (3) A statement, where applicable, that flood insurance coverage is 

available under the NFIP and may also be available from private 

insurers; and

    (4) A statement whether Federal disaster relief assistance may be 

available in the event of damage to the building or mobile home caused 

by flooding in a Federally-declared disaster.

    (c) Timing of notice. The credit union shall provide the notice 

required by paragraph (a) of this section to the borrower within a 

reasonable time before the completion of the transaction and to the 

servicer as promptly as practicable after the credit union provides 

notice to the borrower and in any event no later than the time the 

credit union provides other similar notices to the servicer concerning 

hazard insurance and taxes. Notice to the servicer may be made 

electronically or may take the form of a copy of the notice to the 

borrower.

    (d) Record of receipt. The credit union shall retain a record of the 

receipt of the notices by the borrower and the servicer for the period 

of time the credit union owns the loan.

    (e) Alternate method of notice. Instead of providing the notice to 

the borrower required by paragraph (a) of this section, a credit union 

may obtain satisfactory written assurance from a seller or lessor that, 

within a reasonable time before the completion of the sale or lease 

transaction, the seller or lessor has provided such notice to the 

purchaser or lessee. The credit union shall retain a record of the 

written assurance from the seller or lessor for the period of time the 

credit union owns the loan.

    (f) Use of prescribed form of notice. A credit union will be 

considered to be in compliance with the requirement for notice to the 

borrower of this section providing written notice to the borrower 

containing the language presented in the appendix to this part within a 

reasonable time before the completion of the transaction. The notice 

presented in the appendix to this part satisfies the borrower notice 

requirements of the Act.