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Apr 01, 2010
Categories: Consumer Lending Home-Secured Lending Business Lending

Federal Reserve Consumer Affairs Letters; San Antonio Reminder

Posted by Anthony Demangone

The Fed does a nice job with its Consumer Affairs Letters.  Consumer Affairs letters address significant policy and procedural matters related to the Federal's consumer compliance supervisory responsibilities. Even though they are not designed for us, they can be very useful.  Case in point:

  • 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.  

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Reminder: I want to invite you to attend a free regulatory compliance overview that I’ll be providing during NAFCU’s upcoming Volunteers Conference in San Antonio, Texas.  The session will run from 2:00 p.m. to 4:00 p.m. on Thursday, May 20, 2010 at the Marriott San Antonio Rivercenter.  

I plan to cover a wide range of compliance topics (ramble) during these two hours.  I'm sure I'll hit on overdraft protection, Reg Z, the SAFE Act and more.  I'll probably mention Penn State football and force you to see a few pictures of my kids as well.  Attendees of this session will also obtain 1.75 credit hours for their NCCO designation.

After our compliance session, you are also invited to attend the opening cocktail party at the Volunteers Conference.  The cocktail party is from 4:00 p.m. to 5:00 p.m. at the  Marriott San Antonio Rivercenter and serves as a meet and greet opportunity for folks attending the conference.

There is no registration fee or cost for you to attend this compliance roundup, and it is open to NAFCU members and non-members.   
We do need you to RSVP ASAP so we can make arrangements for meeting space at the hotel.  So please contact NAFCU staffer Olivia Gonzaga, at ogonzaga@nafcu.org or 703-842-2205, to let us know how many from your credit union will be attending this special compliance roundup.

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