exemption, a structure that is part of a residential property but is detached from the primary residential structure of the property and does not serve as a residence is not required to be covered by fl ood insurance. A bank may choose, how-ever, to require fl ood insurance on the detached structure to protect the collateral securing the mortgage. • Th e requirement for a bank, or a servicer acting on its be-half, to escrow premiums and fees for fl ood insurance for any loan secured by residential improved real estate or a mobile home that is made, increased, extended, or renewed on or after Jan. 1, 2016. Certain loans are excepted from this requirement. Small lenders that have total assets of less than $1 billion and, as of July 6, 2012, (1) were not required by applicable federal or state law to escrow taxes or insur-ance for the entire term of the loan, and (2) did not have a policy of consistently requiring escrow of taxes or insur-ance, are also excepted from this requirement. • Th e requirement for a bank that is subject to the escrow requirement to off er and make available to borrowers the option to escrow fl ood insurance premiums and fees for loans that are outstanding as of Jan. 1, 2016. Banks were required to deliver information to borrowers on the escrow option by June 30, 2016, and to implement the escrow as soon as reasonably practicable after receiving a borrower’s request to escrow. • Changes to the force placement provision of the FDPA clarifying that a bank, or a servicer acting on its behalf, has authority to charge a borrower for the cost of force-placed fl ood insurance coverage beginning on the date the bor-rower-purchased coverage lapsed or became insuffi cient. In addition, the bank must terminate force-placed insurance coverage within 30 days of receipt of confi rmation of a bor-rower’s existing policy and must refund to the borrower all premiums and fees for force-placed insurance paid by the borrower during any period of overlap between the bor-rower’s policy and the force-placed policy. • Examination procedures for determining compliance with the detached structure, escrow, and force placement provisions. Th e Biggert–Waters Flood Insurance Reform Act of 2012 and the Homeowner Flood Insurance Aff ordability Act of 2014 amended the FDPA provisions pertaining to the exemp-tions from the requirement to purchase fl ood insurance, the escrowing of fl ood insurance premiums and fees and the force placement of fl ood insurance. Th e OCC, the Federal Reserve Board, the FDIC, the National Credit Union Administration and the Farm Credit Administration jointly issued rules addressing the exemption from the mandatory purchase requirement for detached struc-tures, the escrow requirement and the force placement provision in July 2015. In addition, the Biggert–Waters Act added to the FDPA a provision mandating the acceptance of a private fl ood insurance policy meeting certain criteria in satisfaction of the mandatory purchase requirement. Th e agencies indicated in the 2015 rule-making that the private insurance provision will be addressed in a separate rulemaking. L FDIC’S SUPERVISORY INSIGHTS ADDRESSES LIQUIDITY RISK TRENDS iquidity risk trends at community banks and the Bank Secrecy Act supervision program are highlighted in articles in the summer issue of the FDIC’s Superviso-ry Insights. “Community Bank Liquidity Risk: Trends and Observations from Recent Examinations” emphasizes the importance of liquidity risk management and describes contingency funding strategies to help community banks mitigate potential stress. “Th e Bank Secrecy Act: A Supervi-sory Update” provides an overview of the BSA/Anti-Money Laundering (AML) examination, discusses trends in super-vision and enforcement, and includes examples of rare, but signifi cant, failures identifi ed by FDIC examiners in BSA/ AML compliance programs. “We encourage management to consider their bank’s liquidity position and to be aware of potential funding issues that can arise in stress situations,” said Doreen R. Eberley, director of the FDIC’s Division of Risk Management Supervision. “Th is article is intended as a resource for bankers as they develop and revise contingency funding plans in a dynamic environment.” Supervisory Insights also includes a “Regulatory and Supervisory Roundup” section, which provides an overview of recently released regulations and supervisory guidance. Supervisory Insights provides a forum for discussing how bank regulation and policy are put into practice in the fi eld, promot-ing sound principles and practices for bank supervision, and communicating about the emerging issues that bank supervi-sors face. Th e journal is available on the FDIC’s website at www. fdic.gov/supervisoryinsights. Suggestions for future topics and requests for permission to reprint articles should be emailed to firstname.lastname@example.org. For Bank Board Letter subscription information, visit www.BankNews.com or contact Kristi Wagner, email@example.com or 800-336-1120, Ext. 7053. 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