New York Creates State-Level CFPB and Proposes Flood Insurance Law
NYDFS Creates State-Level CFPB
The New York Department of Financial Services (NYDFS) recently created its own state-operated version of the CFPB known as the Consumer Protection and Financial Enforcement Division (CPEFD). This new unit was emerged through a unification of the preexisting Enforcement and Financial Frauds and Consumers Protection units. In a press release announcing the new unit, Acting Superintendent Lacewell said the division will be a “powerhouse” to “guard against financial crises and to protect consumers and markets from fraud.” Katie Lemire was chose to lead the division.
To review the official Press Release, including more information about Ms. Lemire, please refer to https://www.dfs.ny.gov/reports_and_publications/press_releases/pr1904291
NY Proposed Flood Insurance Law
A bill was proposed in NY Senate (S4629) that would regulate the force-placement of flood insurance.
In summary, the law would:
- Prohibit lenders from requiring flood coverage greater than outstanding balance of the mortgage;
- Prohibit lenders from requiring contents coverage;
- Prohibit lenders from requiring deductibles less than $5,000; and
- Require the following language to be included in flood notifications to the borrower:
Please note that the flood insurance we are requiring you to purchase will only protect your creditor/lender’s interest in your property. It may not be sufficient to pay for many needed repairs after a flood and may not compensate you for your losses in the property due to the flood. If you wish to protect your home or investment, you may wish to purchase more flood insurance than the amount we are requiring you to buy.
The recently introduced bill is currently in the Senate Judiciary Committee.
Proctor will continue to monitor these legislative and regulatory changes and will provide updates as they develop.