Flood insurance. Q: How does the bank handle a real estate loan with force-place flood insurance when the note balloons? Does the customer have to get their own insurance before the bank can renew the balloon? A: No. The bank may send the customer a notice encouraging them to get their own flood insurance because it may give them better coverage, etc. In the past, the bank would not have been able to rely on force-placed coverage as adequate flood coverage to allow it to make/renew/ extend a loan. However, in May 2022, the agencies updated the Interagency Questions and Answers Regarding Flood Insurance and one of the answers in this document states that lenders now may rely on force-place flood insurance when refinancing, increasing, etc. an existing loan that has such coverage. Regulation D. Q: Does a business customer that is a DBA with an Employer Identification Number (EIN) still qualify for a NOW account? Normally, DBAs are registered under the owner’s Social Security Number (SSN). A: Whether an SSN or EIN is used for the account is not the governing issue. The key is whether the DBA is a sole proprietorship or not. If it is, it qualifies for a NOW. If it is a partnership or a corporation (Inc., LLC), it does not qualify for a NOW (but does for an interest-bearing DDA, as does anyone). Young & Associates, Inc., provides banks and thrifts with support for their compliance programs, independent reviews, and in-bank training, as well as a full menu of management consulting, loan review, IT consulting, and policy systems. William J. Showalter can be reached at (330) 678-0524 or wshowalter@younginc.com. 22 NEBRASKA INDEPENDENT BANKER
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