Comment Letter to the Agencies on the Proposed Flood Q&As

Office of the Comptroller of the Currency
Chief Counsel’s Office
Attention: Comment Processing
400 7th Street, SW
Suite 3E-218
Washington, DC 20219

Gerard S. Poliquin
Secretary of the Board
National Credit Union Administration
1775 Duke Street
Alexandria, VA 22314-3428

Ann E. Misback
Secretary
Board of Governors of the Federal Reserve System
20th Street and Constitution Avenue, NW
Washington, DC 20551

David P. Grahn
Director, Office of Regulatory Policy
Farm Credit Administration
1501 Farm Credit Drive
McLean, VA 22102-5090

Robert E. Feldman
Executive Secretary
Attention: Comments/Legal ESS
Federal Deposit Insurance Corporation
550 17th St NW
Washington, DC 20429

Ladies and Gentleman:

The American Bankers Association (ABA) appreciates the opportunity to comment on the Office of the Comptroller of the Currency; Board of Governors of the Federal Reserve System; Federal Deposit Insurance Corporation; Farm Credit Administration; and National Credit Union Administration (collectively, the Agencies) proposal to reorganize, revise, and expand the Interagency Questions and Answers Regarding Flood Insurance (proposed Q&As). We recognize the considerable effort that went into reorganizing and revising the existing Q&As. We comment on each section separately. For Q&As not directly addressed in this comment letter, ABA has no comment at this time but may offer further analysis at a later date as issues become known.

I. Summary of Comment

ABA welcomes this guidance on flood compliance, in light of the substantial legislative and regulatory changes brought about by the 2012 Biggert-Waters Flood Insurance Reform Act (BWA), the 2014 Homeowners Flood Insurance Affordability Act (HFIAA), and the 2019 final rule regarding the acceptance of private flood insurance (Private Flood Rule). Bankers routinely report that examiners cite flood violations for matters and issues not covered or specifically addressed by the regulations. Banks are eager to comply with the flood requirements but are challenged by unclear rules and supervisory expectations. Additionally, banks regularly confront examiners who are eager to cite technical errors that do not harm borrowers, negatively impact safety and soundness, or raise the risk of flood loss as contemplated under the National Flood Insurance Act of 1968 and the Flood Disaster Protection Act of 1973 and subsequent revisions (collectively, the Statute).

While we appreciate the Agencies’ commitment to issuing additional Q&As that respond to industry questions on the Private Flood Rule, we encourage their publication as quickly as possible so that lenders can confidently accept private policies, where appropriate. ABA further encourages the Agencies to review and revise the Q&As on a regular basis, which would provide industry and other stakeholders predictable opportunities to provide feedback on compliance issues and questions as they arise, which will facilitate compliance and borrower protection from flood risk.

Lastly, we ask the Agencies to include in the final Q&As a clear and explicit statement referencing the Interagency Statement Clarifying the Role of Supervisory Guidance, issued in September 2018. The Q&As should state clearly that they are guidance, not regulation, and that failures to comply with the Q&As are not grounds for matters requiring attention (“MRAs”), matters requiring immediate attention (“MRIAs”), or any other adverse supervisory action.

Download the comment letter to read the full text.