Posted by Anthony Demangone
The Fed does a nice job with its Consumer Affairs Letters.
- The Fed issued this CA letter to address the recent lapse of the National Flood Insurance Plan. Attached, is a nice guidance document that answers many questions in relation to the Fed's flood insurance regulation. NCUA has a very, very similar regulation, found in Part 760. Here's a snippet from the guidance:
Does a lapse in FEMA flood insurance authority mean that loans secured by improved real property located in special flood hazard areas may not be made by lenders?
No, it does not. Lenders are not precluded during a lapse in flood insurance authority from making loans due to a lack of NFIP flood insurance. However, flood insurance is not available under the NFIP during a lapse. During a lapse, a lender may legally make a loan to a borrower secured by improved real property in a SFHA without requiring the borrower to obtain flood insurance coverage. This does not mean, however, that a lender is relieved of other obligations under federal flood insurance law nor does it mean that safety and soundness considerations can be disregarded. Both of these matters are dealt with in more detail below.
As always, read all of the guidance document. There is a ton of useful information there.
- The Fed also issued this CA letter concerning the submission of consumer credit card agreements, now a requirement (with exceptions) thanks to the Credit CARD Act.
- Finally, there is this CA letter, which addresses interagency exam procedures regarding the FACT Act "Duties of Furnishers of information" requirements. NCUA issued its own rules, in Part 717 of its rules and regulations. Attached to the letter is a copy of the exam procedures. The procedures give background information as well as the questions that examiners will be asking. Good, good stuff.