We are FDIC regulated. I've spoken to a number of other community banks of similar size to mine (just big enough to be a large bank under CRA but too small to be influential) who have been examined by the same office and they have had a similar experience.

It is not fun to tell a customer that we know MegaBank down the street could have closed their loan already and we have everything we need, but are waiting 5 more days to close in order to make our regulator happy!

We are expecting our next exam this fall, first time under the new examiniation scheme. At the ABA compliance school, we were told that the goal of the new exams is to be more collaborative and helpful, so I'm choosing to be hopeful.

We were cited a few years ago for not obtaining the determination ten days in advance of closing. At the last exam (early 2003) they (FDIC) made no comment regarding the ten days. They did find two loans where we extended the maturity without providing another flood notice. They threatened CMP's in the report, but "waived" them because "borrowers were aware their property was in a flood hazard area and had sufficient levels of insurance." DUH. Wonder why our customers sometimes think we're stupid? Rick, I know you have flood insurance (and a jon boat tied to the back of the house,) but I have to give you this notice that says you're in a flood zone.

My other bank has an FDIC exam starting in ten days. That bank is in a county with no mapping. Wish me luck.

You should not be having to wait to close your loan, so long as you order your determination basically at time of application (as soon as a positive credit outcome is made) and close as soon as you receive the determination of "no flood zone". Period! Your examiner's are wrong and are misunderstanding the "intent" of the reasonable time. The problem comes in when you take 45 days to close and you didn't bother to order the determination until day 40.

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order your determination basically at time of application

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Once again, we see why you are called Joker! I'm lucky if some of my officers remember to "pull a flood" more than a day before closing! ...and our main office is 75 yards from the Mighty Mississippi! Talk about constant reminder.

Susan, It may be time to take the next step with your examiners. Provided that your bank does not have significant issues in other areas, I would suggest some candid dialog with the local examiner stating your case and letting them know that you would really like to get a ruling from higher up. This sticking point should not put your bank at a competitive disadvantage. You might try the FDIC equivilent of the Ombudsman or maybe even FDIC legal in Washington.

Additionally, this is not an FDIC law, it would seem that they may need to look to FEMA for guidance.

GreatRiver - do you perform audits and write this up as a finding? During our last compliance exam I had pointed out numerous deficiencies with our flood program that were ignored. The examiners were flabberghasted that no one had corrected the issue. CYA

Thank you Skittles. I will do. I am just starting in my newly appointed career in loan compliance. I am beginning with education and moving on to documentation. Flood has come up every exam since well before I started here over seven years ago. If I could get flood insurance to count as a cross-sell, we would be better off, but we would still fill out the SFHD wrong or some other silly mistake.

I don't know when your next compliance exam is, but this is a major hot button.

Just found out we're on the schedule for the 3rd quarter. I won't ask you all to keep your fingers crossed from now until then, but my typo quotient goes up, you'll know why...

FRS examiners just left. Flood WAS big with them.

Recently found out that, if the loan doesn't close, you can cancel the flood and get a refund of most of the cost. (We use First American Flood-check your provider) Now there's no excuse NOT to order it at time of application so we've eliminated that problem here.