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CUNA backs NFIP amendment ahead of markup
WASHINGTON (5/12/11)--The Credit Union National Association (CUNA) has backed a National Flood Insurance Plan (NFIP) amendment that would preserve the rights of credit unions to protect their collateral from flood hazards. The amendment is expected to be proposed by Rep. Frank Lucas (R-Okla.) during a House Financial Services Committee markup session scheduled for today. H.R. 1309, the Flood Insurance Reform Act of 2011, is set to be marked up. Several bills that would reform portions of the planned Consumer Financial Protection Bureau are also set to be discussed by the committee. The flood insurance-related amendment would clarify that flood insurance purchased by credit unions “would date back to the date the existing policy lapsed or became insufficient in coverage amount, including any premiums or fees incurred during the 45-day notification period.” Credit unions are currently required to force place flood insurance when a borrower fails to maintain the required coverage during the term of the loan. If the credit union determines that the borrower allowed the flood insurance coverage to lapse, the credit union must notify the borrower that he must obtain the insurance. If the borrower does not provide evidence of insurance coverage within 45 days of the notification, the credit union is required to force place the insurance on the borrower’s behalf and may charge the borrower for the cost of the premiums and fees. For the full letter, use the resource link.


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