Pub. 11 2023 Issue 4

extension was not approved by the board. Would this be considered a violation under Regulation O? A: Yes, definitely. Regulation O requires preapproval by the board of directors for any extension of credit in an amount that, when aggregated with the amount of all other extensions of credit to that person and to all related interests of that person, exceeds the higher of $25,000 or 5% of the bank’s unimpaired capital and unimpaired surplus (up to $500,000). So, in all cases, extensions over $500.000 must receive prior approval from a majority of the board. BSA. Q: I have never had this come up before. A customer brought in cash and had our teller count it. It amounted to $200,000. The customer deposited only $5,000 and took the rest of the cash with him because he did not want a Currency Transaction Report (CTR) filed. I am filing a Suspicious Activity Report (SAR) for avoiding the CTR. However, does a CTR also have to be filed on the $200,000 in and the $195,000 taken out. A: From your description of the situation, no CTR is required since the customer did not deposit, withdraw or exchange currency in excess of $10,000. He just had it counted by the teller and then deposited only $5,000 to evade a CTR. However, this is an unusual situation, and you should definitely watch this customer for future structuring attempts. CRA. Q: Is there any kind of checklist of items to look for to see if something qualifies for Community Reinvestment Act (CRA) credit? A: Determining if something “qualifies” for CRA credit really boils down to determining whether something can be classified as “community development.” There is no checklist readily available that I am aware of. There is quite a bit of subjectivity in this area, and the bank needs to look at the definitions of “community development,” “community development loan,” “community development service” and “qualified investment” in the CRA regulation to determine if the loan program it plans to offer or other product or activity it is planning will meet the standards to be considered as “community development.” There is also some additional information in the Interagency Questions and Answers on CRA, as well as in the interagency CRA examination procedures. There are no real shortcuts. Flood Insurance. Q: When is the effective date of a National Flood Insurance Program (NFIP) for a property that has a current mortgage on it and an effective flood policy? Is it 30 days or some shorter time period? This policy ended up being canceled due to nonpayment (payment was received after the reinstatement date). The insurance agent has applied for a new flood insurance policy for the property. The declaration page we just received shows an effective date 30 days from the date of application. Would the fact there is a mortgage on the property and that mortgage is the reason behind the need for flood insurance be an exception to the NFIP standard 30-day waiting period? A: No, that is not one of the allowed exceptions to the standard 30-day waiting period. The 30-day waiting period applies in the situation you described. The only exceptions permitted to this waiting period are: • If the flood insurance is purchased while making, increasing, extending or renewing a covered mortgage loan. • If the Federal Emergency Management Agency (FEMA) revises a flood map such that a building is now identified as being in a Special Flood Hazard Area (SFHA) when it had previously been outside any SFHA. For the first 13 months after such a map revision, the waiting period is shortened to one day. • If privately owned property experiences flooding after a wildfire, if a property is impacted by damage from flooding that originates on federal land, the federal 26 Community Banker

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