The American Bankers Association and 10 other trade groups commented today on the banking agencies’ proposed flood insurance guidance and stressed that question and answers are supervisory guidance and should not serve as the basis for supervisory action.
“A clear statement noting this important distinction would assist regulated institutions in understanding supervisory expectations with regards to the final interagency Q&As,” the groups wrote.
The groups welcomed the additional guidance but noted that the regulators should use clear, consistent language in drafting flood guidance and avoid creating compliance requirements not explicit in the flood statutes or regulations.
“Often, rules that seem straightforward can become complicated when applied in the operational context of real estate finance,” the groups said. “For example, rules that work in single-family residential lending situations are often less clear in the world of multi-family or commercial transactions.”