Academic journal article ABA Banking Journal

ABA Compliance Mailbox

Academic journal article ABA Banking Journal

ABA Compliance Mailbox

Article excerpt

ABA and other experts, coordinated by Christine Walika, federal regulatory representative, answer selected banker questions in this space. Write on letterhead to: Steve Cocheo, ABA Compliance Mailbox, c/o ABA Banking Journal, 345 Hudson St., New York, N.Y. 10014. Or fax questions to (212) 633-1165. Or E-mail to

An Alternative to Force-Placed Flood Insurance Coverage

Q. Could a lender, in lieu of forced-placement procedures that might be required by the new flood rule, obtain blanket insurance coverage to protect against losses on uninsured properties? Because the new procedures (effective Oct. 1) are complex and burdensome for monitoring flood insurance, guarding against lapses, obtaining force-placed coverage, etc., some of the flood insurance underwriters are willing to offer blanket coverage to protect the lender.--H.S., N.C.

A. The statute and the regulation are clear about requiring flood insurance for individual properties. OCC staff concurred; blanket coverage would not take the place of the necessary flood insurance requirements. However, an errors and omissions policy is acceptable as an added precaution.

Some of bankers' additional flood insurance questions should be answered soon in a question-and-answer list the agencies promised to publish in early 1997.

Obtaining CRA "Outstanding"s from OCC

Q. An examiner from the ComptrolIer's Office told us during our bank ' s recent examination that under the new CRA regulation 's small-bank examination the agency will not be issuing "Outstanding" ratings unless the bank has done all the work the regulation says it doesn't have to do--such as geocoding of all of its loans. Is this true?--W.S., Mich.

A. You are not the only banker to ask this question. I spoke with Bert Otto, acting deputy comptroller for compliance management at the OCC, who says that although it is not completely true as stated in your question, he can understand such an assumption.

Examiners enter a bank with a strong presumption that it is a "Satisfactory" unless they discover otherwise during the course of the examination. …

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