November 17, 2017 - As reported in Politico, on Tuesday the House of Representatives passed HR 2874, a series of bills that would extend the National Flood Insurance Program (NFIP), which is set to expire on December 8th, for five years.  The good news?  Section 202 of the bill would get rid of the current NFIP mandate that requires flood insurance on commercial properties. The not-so-good news?  The carve-out for commercial properties is not scheduled to kick in until the beginning of 2019.  Why is this important?  As we discussed in an earlier post, the commercial flood insurance mandate requires banks to ensure that collateral located in a flood zone be insured even if the real estate is not a meaningful or material part of the collateral package.  Often the burdens of compliance (on borrowers as well as banks) far outweigh the value of the insurance.  So, what happens now?  The bill goes to the Senate where an earlier bill extending the NFIP did not contain a carve-out for commercial properties.  Whether the commercial carve out survives the final bill is very difficult to predict but it appears that that result may have to wait.  Insiders are predicting that the Senate will not even take up a long term NFIP extension until the new year, leading Congress to pass a stop gap measure extending the program for a few months. We will continue to follow this important issue until it finally gets resolved.

Become a Member

Membership in the LSTA offers numerous benefits and opportunities. Chief among them is the opportunity to participate in the decision making process that ultimately establishes loan market standards, develops market practices, and influences the market’s direction.

View Current Members

Our Partners

CUSIPFitch Group logoMorningstarRefinitiv-(March-2019)
Total Results: 

Sort by:

Good Friday…no SOFR?

Earlier this month the New York Fed announced that there will be no SOFR rate published on or for Friday, April 7th even though April…

CLOs: No Conflicts…But Big Problems

March 30, 2023 - On Monday, the LSTA submitted the first of three letters responding to the SEC’s Proposed Rule on “Conflicts of Interest in…