Circular
Reauthorization of the National Flood Insurance Program
January 15, 2003
Circular No. 11494

To All Depository Institutions and Others Concerned in the Second Federal Reserve District:

In a press release, the Federal Reserve Board informed state member banks of the reauthorization of the National Flood Insurance Program (NFIP) by the Congress, retroactive to December 31, 2002.

The authority of the Federal Emergency Management Agency (FEMA) to issue flood insurance policies expired on December 31, 2002, after the Congress adjourned without extending FEMA's issuance authority. On December 20, 2002, the federal financial institution regulatory agencies jointly issued interim guidance to assist borrowers and lenders in dealing with questions about what to do during the lapse.

On January 13, 2003, President Bush signed the National Flood Insurance Program Reauthorization Act into law. The Act extends the authorization of the NFIP to December 31, 2003.

The interim guidance issued December 20, 2002 is attached.

Questions on this matter may be directed at this Bank to Maryann Campbell, Senior Bank Examiner, Legal and Compliance Risk Department.