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Friday, December 19, 2014

This Week at the CFPB

A summary of this week's news about the CFPB from the ABIA and ABA Dodd-Frank Tracker:
The ABIA has a Task Force of members that work on issues related to the CFPB's regulation of insurance products. If you are an ABIA member and would like to learn more about ABIA's work with CFPB to educate them about the bank-insurance industry or join our CFPB Task Force, please contact us and visit our website.

ABIA Seek Lender Discretion on Insuring Detached Structures

While the American Bankers Insurance Association and the ABA welcomed recent legislative and regulatory clarification that flood insurance is not required for garages, sheds and other detached, non-residential structures, they said yesterday that lenders should not be constrained by the loan’s purpose and should retain “broad discretion” to require insurance -- for high-value detached structures, for example.

“Congress clearly sought to address a common complaint of borrowers who use residential property to secure a loan: the requirement to purchase a separate policy to insure garden sheds and detached garages against flood loss,” the associations said in a comment letter. “We encourage the agencies to avoid issuing ‘clarifications’ and definitions that will limit unnecessarily the ability of customers to benefit from this provision.”

ABA and ABIA also sought additional clarifications and changes to the proposed rules on mandatory escrow “to ensure that escrow requirements do not inadvertently increase the cost of credit -- without advancing the congressional goal of ensuring that borrowers maintain flood insurance over the life of their loan.”

Read the letter.

For more information, please contact ABIA's Kevin McKechnie.

Thursday, December 18, 2014

ABIA Hosts Compliance Webinar on Lender-Placed Insurance Regulations

Yesterday, the American Bankers Insurance Association hosted a Compliance Webinar and Discussion Group on Lender-Placed Insurance Regulations. Chrys Lemon, McIntyre & Lemon, discussed the notice and due diligence requirements regarding lender placed, or "force-placed," insurance.  The CFPB requires that mortgage servicers provide certain notices to borrowers and perform reasonable diligence before charging borrowers for lender placed insurance.  This webinar presented an overview of those disclosure and due diligence requirement as they relate to when servicers can force place insurance and charge borrowers lender placed insurance premiums.

View the presentation.

Want to learn more about upcoming ABIA Compliance Webinars and Discussion Groups? Contact us and view our website.

Wednesday, December 17, 2014

Senate Adjourns without Renewing TRIA

The Senate last night adjourned for the year without voting to renew the Terrorism Risk Insurance Act, which will expire on Dec. 31. The bill had been blocked in a procedural move by outgoing Sen. Tom Coburn (R-Okla.), who objected to the provision in the TRIA bill establishing a national registry for insurance agents and brokers, NARAB.

With the House having already recessed, Senate Minority Whip John Cornyn (R-Texas) told news outlets that there will not likely be a stop-gap bill to extend TRIA. However, he did state that renewing TRIA is expected to be a priority in the 114th Congress, which will convene on Jan. 6.

What does Congress' failure to renew TRIA mean? Large commercial projects where the lender requires terrorism coverage could be in default on January 1, 2015, unless alternative coverage can be found. New projects where terrorism coverage is required will be postponed until the developer and the lender(s) decide how to proceed. In addition, as reported in the April 2014 Treasury Report on TRIA, rating agencies may write down commercial asset backed securities.

TRIA and NARAB continue to be top legislative priorities for the ABIA and we will renew efforts to ensure both are passed in the new Congress. 

Tuesday, December 16, 2014

ABIA Hosts Best Practices Panel on "Engaging the Next Generation and the New Customer Experience"

Last week, the American Bankers Insurance Association hosted a Best Practices Panel on "Engaging the Next Generation and the New Customer Experience".  With life insurance at a 50-year low, the opportunity to reach millennials in an innovative way has become increasingly important. Tyler Nitz, Mintel Comperemedia, examined the current state of life insurance, strategies for developing products, consumer attitudes and behaviors, and growth opportunities in the digital space.

View the presentation.

Download the recording.

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