FDPA (Flood Insurance) Compliance for a Bank Acquisition

Our client, a super-regional bank, acquired a smaller regional bank and needed to perform a compliance scrub as part of the integration. Compliance standards between institutions often vary, especially when a larger bank acquires a smaller bank. Cushman & Wakefield’s Banking & Regulatory Solutions (BRS), part of Valuation & Advisory, was engaged to staff and manage the compliance scrub, working with the client’s risk department. We focused specifically on Flood Disaster Protection Act (FDPA) compliance, or flood insurance.

Cushman & Wakefield provided a small team of project-based employees with extensive experience in FDPA compliance to perform the scrub. To complete a proper review, our team certified loan collateral with security documents (building and contents), verified Special Flood Hazard Areas (SFHAs) through updated Core Logic determinations, indexed historical insurable values to present, and reviewed flood insurance policies for compliance. We constructed flood compliance packages for each stand-alone property, creating a compliance story for every individual credit.

Our team reviewed every property within an SFHA. Through a partnership with CoreLogic, we ran updated Standard Flood Hazard Determination (SFHDs) on every property, ensuring our client was set up with Life of Loan monitoring. Our team also identified multiple compliance deficiencies and outlined a path to compliance for each credit that required remediation. Lastly, we delivered our findings to the bank remediation team and discussed the nuances associated with every unique scenario.