Lessons Learned From Sandy Can Help Houston Recover

September 5, 2017 at 8:41 am Leave a comment

As I watched the news of the devastation caused by Hurricane Harvey last week, I couldn’t help but think back to the lessons learned by New York lenders as they dealt with the aftermath of Hurricane Sandy. Here are some of the key ones to keep in mind as we deal with yet another epic natural disaster.

  • There is no such thing as too much communication. Many banks and some credit unions I believe were unfairly criticized for failing to quickly disperse insurance funds on damaged property on which they held a mortgage. By all means, lenders should move as quickly as possible to cut checks and approve payouts in situations where they are an insured payee on mortgage property damaged by Harvey. But the need for speed must be balanced against the need to ensure that needed repair work is actually being done. This process will take time. I believe a lot of confusion could have been avoided in New York had lenders been more proactive in explaining not only to members of the public, but to legislators the role that lenders play in the insurance process.
  • This no time for sectionalism or political posturing. The national discourse hit a new low when, in the aftermath of Hurricane Sandy, conservative hard-liners in the House of Representatives initially baulked providing disaster funds to the northeast. Fortunately, commonsense prevailed. Events such as Harvey are national disasters that need national solutions. Not everything has to be political.
  • The most immediate concern is that the National Flood Insurance Program expires on September 30th of this year. On the one hand, Harvey will undoubtedly provide the needed impetus to get the program reauthorized. On the other hand, we need to take a real serious look as to how this country protects itself against floods and storm damage. On paper the existing system makes sense. Homeowners wishing to buy property in communities prone to flooding are required to get insurance. In addition, lenders must ensure that the appropriate insurance is maintained. In reality, the system is woefully inadequate. As storms such as Harvey, Sandy, and Katrina become the “new normal”, policy makers have to recognize that there simply is not enough money stashed away to adequately insure against future disasters. They must either make some tough choices to limit where people can live or they have to make a national commitment to a much more robust insurance framework.

Entry filed under: General, Political. Tags: .

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Authored By:

Henry Meier, Esq., Senior Vice President, General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association. In addition, although Henry strives to give his readers useful and accurate information on a broad range of subjects, many of which involve legal disputes, his views are not a substitute for legal advise from retained counsel.

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