Consumer Credit Industry Association Issues Public Comment on Comptroller of Currency Proposed Rule

WASHINGTON, Oct. 27 -- Tom Keepers, executive director and executive vice president at the Consumer Credit Industry Association, has issued a public comment on the Comptroller of the Currency proposed rule entitled "Loans in Areas Having Special Flood Hazards; Interagency Questions and Answers Regarding Flood Insurance". The comment was written and posted on Oct. 26, 2020:

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The Consumer Credit Industry Association ("CCIA") appreciates the opportunity to comment on the proposed Interagency Questions and Answers Regarding Flood Insurance for Loans in Areas Having Special Flood Hazards ("Interagency Q&A").

CCIA is a national trade association representing manufacturers, administrators and distributors of lender and consumer protection products such as lender-placed flood insurance. Since our members are "providers" of force placed flood insurance, our comments start with the FORCE PLACEMENT questions and then transition into other areas that have implications to force placed flood insurance as well.

Regardless of the outcome of this Interagency Q&A, industry will continue to execute processes that help assure safety and soundness for lenders while making the process as consumer-centric as possible. There simply is no incentive for industry not to adhere to force placed flood insurance requirements and we offer our comments in that spirit.

An overarching theme in this material focuses on defining what lender actions constitute making a "determination" that flood insurance is absent or inadequate and whether that determination (or those actions) are in fact conditional or does that determination prompt a certain consistent obligation of the lender in all cases.

First is the specific use of the verb "determine" in describing the process a lender follows to establish whether a loan is, or is not, adequately insured. Second is that notice to the borrower follows determination and third, that placement follows notice - there is a specific obligation of the lender or their servicer to provide notice after "determining" an absence or insufficiency in coverage.

Additionally, the National Flood Insurance Act ("Act") describes the lender's duty to "determine" sufficiency "at any time during the term of the loan" which we see as assigning no conditions as to whether an individual determination should, or should not, be performed.

This language emphasizes the relationship between the act of determining coverage to be absent or insufficient and the requisite duty to begin the notice process. Force placement of coverage can only follow proper notice as notice can only follow determination. Hence, we would respectfully suggest that the Interagency Q&A reflect a consistent treatment of determination, notice and placement throughout the duration of the loan, for any and all events where coverage is found to be absent or insufficient

View full comment at: https://www.regulations.gov/contentStreamer?documentId=OCC-2020-0008-0019&attachmentNumber=1&contentType=pdf

Sincerely,

Tom Keepers

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The proposed rule can be viewed at: https://www.regulations.gov/document?D=OCC-2020-0008-0012

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