February 9, 2022 - Today, the LSTA published updated LSTA Market Standards for Flood Insurance Processes in Syndicated Lending which are intended to establish uniform procedures for agent banks with respect to (i) obtaining documents which evidence compliance with the flood laws and (ii) adequate ongoing monitoring of such compliance by the lenders.  Federally-regulated lenders are subject to federal flood insurance laws and regulations (“flood laws”). The flood laws require those lenders to determine whether the collateral securing a loan includes any improved real property in an area designated by FEMA as being subject to special flood hazards (SFHA) and, if it does, to ensure that adequate flood insurance is in place.  Adherence to these guidelines by agents will allow lenders to determine that the flood laws have been complied with before they fund in the primary and will help ensure the timely closing of each loan.

Please find here the 2022 LSTA Market Standards for Flood Insurance Processes in Syndicated Lending and here a blacklined version which shows the changes made to the 2014 version. The changes relate for the most part to the implementation of the final regulations under the Biggert-Waters Act which have taken effect.

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