Interagency Request for Comment: MCUL Comments on Interagency Flood Proposal
On Dec. 10, the MCUL & Affiliates provided its comment letter to the NCUA regarding the Interagency Proposal addressing loans in areas having special flood hazards. The proposed rule addresses amendments to the National Flood Insurance Program as amended in the Biggert-Waters Act specifically:
- requiring regulated lending institutions to escrow premiums and fees for flood insurance on residential improved real estate, unless the institutions meets the statutory small institution exception,
- directs regulated lending institutions to accept private flood insurance and notify borrowers of the availability of private flood insurance and
- amends the force-placement requirement to clarify that regulated lending institutions may charge a borrower for the cost of premiums and fees incurred for coverage beginning on the date in which the flood insurance coverage lapsed or did not provide sufficient coverage and to prescribe the procedures for terminating the force-placed insurance.
MCUL was generally supportive of the requirements addressed in the proposal, however MCUL asked the agencies to be cognizant of the current regulatory burdens credit unions are facing and be mindful of placing additional regulatory requirements on credit unions. MCUL also asked the agencies to consider extending the effective date of compliance or provide for a waiver in the event a compliance date cannot be met.
The MCUL’s Comment Letter can be found here.