ARLINGTON, Va.—NAFCU is calling on NCUA and other agencies to keep in mind the potential for “significant costs” to CUs following a multi-agency joint notice of proposed rulemaking regarding loans in areas having special flood hazards.
The notice of proposed rulemaking would amend regulations regarding loans in areas having special flood hazards to implement provisions of the Homeowner Flood Insurance Affordability Act of 2014 (HFIAA). Specifically, the proposal would establish requirements for financial institutions with assets of more than $1 billion or servicers acting on their behalf, with respect to the escrow of flood insurance payments, consistent with the changes set forth in HFIAA.
In a comment letter, NAFCU Regulatory Affairs Council PJ Hoffman cautioned that "There are significant costs associated with establishing and maintaining escrow accounts. NAFCU has heard from a number of credit unions in rural and underserved areas that are concerned that this added cost could drive them out of the mortgage business for homes in flood hazard areas, ultimately limiting consumer options."
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