The National Credit Union Administration, alongside other federal financial institution regulatory agencies, reminded lenders that they may continue to make loans subject to the federal flood insurance statutes when the National Flood Insurance Program is unavailable, and that such loans may be made without requiring federal flood insurance during the lapse. The reminder points to the Interagency Questions and Answers Regarding Flood Insurance (Q&A Applicability 12), which states that lenders must still perform flood determinations, provide timely, complete and accurate notices to borrowers, and comply with other applicable parts of the flood insurance regulations. Lenders are also expected to evaluate safety and soundness and legal risks and prudently manage those risks during the lapse period, and the guidance addresses the availability and use of private flood insurance.
National Credit Union Administration 2025-10-01
US National Credit Union Administration reminds lenders they may continue covered lending during National Flood Insurance Program lapse without requiring federal flood insurance
Federal regulators, including the National Credit Union Administration, reminded lenders they can issue loans under federal flood insurance statutes without requiring federal flood insurance when the National Flood Insurance Program is unavailable. Lenders must still conduct flood determinations, provide accurate borrower notices, and comply with flood insurance regulations. The guidance also covers risk management during the lapse and the use of private flood insurance.