On January 13, 2003, the President signed into law H.R. 11, the "National Flood Insurance Program Reauthorization Act of 2003," which extends the authorization of the National Flood Insurance Program (NFIP) to December 31, 2003, and is retroactive to December 31, 2002. As noted in the December 20, 2002, interagency guidance (see FIL-142-2002), effective with the reauthorization, flood insurance coverage must be obtained for any loan made during the lapse period for property subject to mandatory flood insurance coverage.

The Federal Emergency Management Agency's (FEMA's) authority to issue flood insurance policies expired on December 31, 2002, after the Congress adjourned without extending FEMA's issuance authority under the NFIP. On December 20, 2002, the federal financial institution regulatory agencies jointly issued guidance to assist borrowers and lenders in dealing with issues that could arise during the lapse in federal flood insurance authority beginning on January 1, 2003. In the guidance, the agencies indicated they would notify lenders of any Congressional action to reauthorize the NFIP.

Questions concerning this matter may be directed to Mira N. Marshall, Senior Policy Analyst, Division of Supervision and Consumer Protection, on (202) 898-3912 or Mark A. Mellon, Counsel in the Legal Division, on (202) 898-3884.

For your reference, FDIC Financial Institution Letters may be accessed from the FDIC's Web site at http://www.fdic.gov/news/news/financial/2003/index.html.

	Michael J. Zamorski
	Director

Distribution: FDIC-Supervised Banks (Commercial and Savings)