ABA supports the long-term reauthorization and reform of the National Flood Insurance Program (NFIP) as well as the development of the private flood insurance market.
May 31, 2019 is the current deadline for reauthorization of the National Flood Insurance program (NFIP). Despite passage of a five year reauthorization/reform measure by the House of Representatives in the last Congress, the Senate did not act on long-term reauthorization and the NFIP has been operating on short-term extensions. Lapses in program authority can cause delayed, and in some instances, cancelled loan closings. ABA advocacy is focused on timely and long-term reauthorization, as well as reforms to address the program’s sustainability, affordability and availability, including providing lenders with the tools needed to better serve their customers.
The recurring reauthorization deadlines also highlight the existing lack of guidance following the last round of legislative changes by Biggert-Waters and HFIAA. The banking agencies only finalized implementing regulations regarding the acceptance of private flood insurance in January with an effective date of July 1, 2019. The Interagency Questions and Answers have not been updated since 2011. Neither FEMA nor the banking agencies have updated the Mandatory Purchase of Flood Insurance Guidelines to reflect the last round of legislative changes, despite repeated requests from ABA. Bankers report that examiners are citing violations for matters not covered by the regulations and interagency exam procedures. Banks want to comply but are challenged by unclear rules and supervisory standards. We must urge the Agencies to provide clear guidance on flood insurance compliance.
What We Are Asking
We anticipate that legislation will be considered in the House of Representatives in the near future to reform and reauthorize the NFIP. ABA will provide background and a summary of this legislation when it is introduced.
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