As winter approaches, many credit unions are about to make changes to their Final Flood Insurance Rule Amendments that went into effect Oct. 1, 2015, and more changes are on the horizon with the flood insurance rules, which will start Jan. 1, 2016.

Financial institutions with assets of $1 billion or more will have to begin escrowing for flood insurance premiums and other fees for any designated loan secured by residential improved property or a mobile home that is originated, refinanced, increased, extended or renewed on or after Jan. 1, 2016. However, there is a small lender exemption for financial institutions with assets of less than $1 billion. These institutions are not required to escrow for flood insurance premiums and fees, unless they have a policy of uniformly and consistently escrowing for taxes and insurance or if they were otherwise required by Federal or State law to escrow for taxes and insurance as of July 6, 2012 (the enactment date of the Biggert-Waters Act) for the term of the loan.

The federal financial regulatory agencies jointly amended their flood insurance regulations in order to incorporate changes effected by the Homeowner Flood Insurance Affordability Act of 2014 credit unions need to pay attention to not only the regulators, but also to the weather predictions.