WASHINGTON (2/11/15)--CUNA is warning the Federal Emergency Management Agency (FEMA) that proposed changes to its standard form for determining whether a property is located in a flood-hazard zone could double the work and cost for credit unions and others that use the form.
The form involved is the Standard Flood Hazard Determination Form. It is used during a mortgage loan request to determine if a building or mobile home is in an area determined by the FEMA director as having special flood hazards and in which flood insurance is available under the 1994 National Flood Insurance Reform Act.
One proposed FEMA change would add a page to the now single-page form. CUNA said that change would immediately double the cost of reproducing the form, which FEMA estimates may be used at least 45 million times annually by different stakeholders. It also would require costly reprogramming of current systems.
Another change--adding pagination to the form--would also require lenders to make system changes and incur regulatory burden, CUNA warned.
CUNA sent a joint comment letter to FEMA Monday as part of a coalition of eight trade associations whose memberships would experience increased regulatory burden due to the FEMA change.
CUNA and its partners said they welcome "thoughtful improvements" to the form--even if it means the addition of fields that require more data collection.
"We are concerned, however, when proposed changes to the form, whether in required format or data collection, increase the burden of compliance without commensurate benefit," the letter stated.