WASHINGTON—CUNA said it supports the Department of Veterans Affairs’ review of its regulation involving VA-Guaranteed Home Loans, but is urging the VA to ensure it has conducted adequate outreach prior to making any changes in its rules.
CUNA separately called for reauthorization of National Flood Insurance Program.
CUNA responded with a letter to the VA regarding its advanced notice of proposed rulemaking (ANPR) on possible revisions to the allowable charges and fees associated with VA-Guaranteed Home Loans.
“We appreciate VA’s initiative to determine whether it can improve the protections afforded veterans as they work through the homebuying process,” the letter reads. “We urge VA to ensure it has a complete picture of the current harms and benefits associated with the existing regulation governing VA-Home Mortgage Loans before it proceeds with a formal rulemaking.”
While CUNA supports the efforts to review the regulation—as well as the decision to issue an ANPR—it believes the VA should measure the current benefits against any improvements that could be achieved by revising it and any potential unintended consequences that might follow.
“Our emphasis on adequate outreach should in no way be misconstrued as a lack of concern for appropriate protections for our veterans,” the letter reads. “We are fully supportive of VA’s review of the current regulation. However, as has been apparent with several recent major financial rulemakings—specifically regarding mortgage loans—it is more important and financially prudent to ensure all relevant information has been obtained prior to embarking on a formal rulemaking.
“Such an approach is much more favorable for both financial institutions and consumers than an approach that involves rushing a rulemaking only to then being forced to ‘clean it up’ through subsequent amendments and interpretive guidance,” the letter adds.
Separately, CUNA reiterated its support for the reauthorization of the National Flood Insurance Program (NFIP) in a letter to House Financial Services Committee leadership this week.
The letter was sent for the committee’s hearing on flood insurance reform, and follows a similar letter CUNA sent in May to the Senate Banking Committee for an NFIP hearing.
“CUNA strongly supports your efforts to reauthorize the NFIP later this year," CUNA President/CEO Jim Nussle wrote. "We also recognize that continuing reforms may be necessary to improve the actuarial footing of the NFIP and to ensure stability in the housing market in affected areas. At the same time, it is vital that flood insurance premiums remain affordable so that families in parts of the country where flood insurance is required are not shut out of the opportunity to own a home."
The House Financial Services Committee has produced several legislative drafts for NFIP reform, each addressing an aspect of the program.
CUNA said it would support efforts to:
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Decrease to 15%, from 18%, the cap on annual rate increases and to limit the chargeable risk premium for any single-family residence to $10,000 per year; and
- Increase the transparency of the NFIP, including requiring the Federal Emergency Management Agency administrator to advise the public on its methodology for determining annual risk premium rates for NFIP coverage, as well as various proposals to improve and streamline the flood mapping process.
CUNA stated that it also has reservations about a proposal that would increase civil money penalties on federally regulated lenders for failure to comply with the NFIP’s mandatory purchase requirements to $5,000, up from $2,000.
"We believe the burden associated with compliance with flood insurance regulations is already too high, particularly for smaller lenders, and any increase in civil money penalties would increase this burden even further," Nussle wrote.