WASHINGTON–CUNA has filed a letter with NCUA regarding an interagency proposal to amend regulations regarding loans in areas having special flood hazards to implement the private flood insurance provisions of the Biggert-Waters Flood Insurance Reform Act of 2012.
As mandated by the Biggert-Waters Act, the proposed rule would require lending institutions—including credit unions—to accept policies that meet the statutory definition of “private flood insurance” and permit them to accept flood insurance provided by private insurers that does not meet the statutory definition but does meet certain established criteria.
CUNA is generally supportive of the plan, but did offer some suggested improvements in its letter.
The letter is generally supportive of the proposal and includes a few suggested improvements, including asking NCUA to “be mindful of placing additional regulatory requirements on credit unions and to provide adequate time for compliance with any new requirements, being mindful that the changes contemplated will affect most—if not all—credit unions.”
One area of suggested improvement by CUNA relates to the section related to Compliance Aid for Mandatory Acceptance and how a “safe harbor” provision would work.
CUNA noted that many of the comment letters in response to the plan “raised concerns about the feasibility of state insurance regulators determining if private flood insurance is compliant with the Biggert-Waters Act, a Federal statute…Further, commenters expressed concern over the current lack of a mechanism or process for a state insurance regulator to make such a determination. They also shared concern about a potential lack of consistency among the state regulators, which could result in numerous different state standards.”
CUNA is urging the agencies to revisit a possible “safe harbor” by working with state insurance regulators.
A copy of the letter can be found in CUToday.info’s The gov here.