PART TWO.
Yesterday I submitted Comments to proposed joint rulemaking by five (5) Federal agencies. Flood Insurance is the topic of their proposed Rules. The period for public Comments closes one week from today, on December 29, 2014.
Specifically, the five agencies jointly requested Comments on their proposed Rules regarding “Loans in Areas Having Special Flood Hazards”. What follows is the first of my Comments.
If you disagree with my Comments I urge you to tell the agencies so, by leaving your own Comments. If you agree with my Comments I urge you to tell the agencies so, by leaving your own Comments.
Everything you need is here. You can leave your Comments at the Federal eRulemaking Portal. The web address is given below. Or you can send a joint EMail to the five agencies. Their EM Addresses are listed below too. In either case, the “subject line” or “re clause” information that you need for your Comments is also set out below for your ease of use.
December 22, 2014
BY FEDERAL eRULEMAKING PORTAL AND VIA EMAIL
Federal eRulemaking Portal:
OCC EMail Add.: regs.comments@occ.treas.gov
Board EM Add.: regs.comments@federalreserve.gov
FDIC EM Add.: comments@FDIC.gov
FCA EM Add.: reg-comm@fca.gov
NCUA EM Add.: regcomments@ncua.gov
Re: “Loans in Areas Having Special Flood Hazards”.
OCC: Docket ID OCC-2014-0016
Board: Docket No. R-1498
RIN 7100-AE22
FDIC: “Loans in Areas Having
Special Flood Hazards”.
FCA: “Law & Regulations”/“FCA Regulations”
/“Public Comments”
NCUA: RIN 3133-AE40
To the Agencies:
SUMMARY OF MY COMMENTS IN THIS LETTER:
* * *
(2) My second Comment adds a provision which would clarify the standard which a lender or servicer must meet in complying with the proposed escrow requirement. The standard which such a lender or servicer must meet is the standard of conduct of a fiduciary in its dealings with the borrower’s flood insurance escrow account which the proposed Rule will now require.
* * *
(2) My second Comment concerns the new escrow requirement. I would add a new provision to the proposed Rule, as follows:
The escrow account required in the first paragraph of this section, and by the Flood Disaster Protection Act, as amended, of all premiums and fees for any flood insurance required under these Rules and by the FDPA, as amended, shall be maintained by the mortgage lender or servicer as a fiduciary of the funds of the borrower.
This provision would establish the responsibility required by the escrow requirement in a single standard of performance. The FDPA, as amended, and the proposed Rule establish the required escrow account. It clearly sets out the measure of behavior which must be met by any mortgage lender or servicer which is thereby required to manage the newly required escrow account.
This provision set out in my second Comment would set forth a new provision in the following Rules of the five (5) respective joint Agencies involved:
- OCC: This would add a new 12 CFR § 22.5(a)(4).
- Board: This would add a new 12 CFR § 208.25(e)(1)(iv).
- FDIC: This would add a new 12 CFR § 339.5(a)(4).
- FCA: This would add a new 12 CFR § 614.4935(a)(4).
- NCUA: This would add a new 12 CFR § 760.5(a)(4).
The third and final Part of “A Modest Proposal: Comments to New Flood Insurance Rules” will be published tomorrow on Insurance Claims and Issues Blog. Please Read The Disclaimer. ©2014 by Dennis J. Wall. All rights reserved.