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From Banking and Finance Law Daily, July 25, 2018

Trump administration supports extending National Flood Insurance Program with reforms

By Thomas G. Wolfe, J.D.

While supporting the National Flood Insurance Program (NFIP) and legislative efforts to reauthorize the NFIP so that it does not lapse on July 31, 2018, the Trump administration "continues to strongly support reforms to the program to ensure its long-term viability." As communicated in a July 24, 2018, statement from the White House press secretary, the administration believes that the NFIP "cannot handle catastrophic losses like those caused by the devastating hurricanes in 2017." Noting that it has proposed several "commonsense reforms" in the past to put the NFIP on sound financial footing while maintaining affordable rates for low-income policyholders, the White House specifically endorses the "21st Century Flood Reform Act" in the House and the "Flood Insurance Market Parity and Modernization Act" in the Senate, and urges Congress to "consider these reforms and others as the future of the NFIP is debated."

H.R. 2874 and S. 563. Among other things, the 21st Century Flood Reform Act (H.R. 2874) seeks to "achieve reforms to improve the financial stability of the National Flood Insurance Program, to enhance the development of more accurate estimates of flood risk through new technology and better maps, to increase the role of private markets in the management of flood insurance risks, and to provide for alternative methods to insure against flood peril."

Similarly, the Administration views the Flood Insurance Market Parity and Modernization Act (S. 563) as helping to "develop the private market" for flood insurance. In addition, the bill would amend the Flood Disaster Protection Act of 1973 to require that "certain buildings and personal property be covered by flood insurance."

ABA’s support for S. 1182. Meanwhile, in a July 24 letter to congressional leaders, the American Bankers Association expresses its support for the "National Flood Insurance Program Extension Act of 2018" (S. 1182). While the ABA agrees that reforms are needed, it also observes that "Congress has been unable to come to an agreement on reforms to the NFIP" as the July 31 lapse date approaches. Accordingly, the ABA letter urges Congress to approve S. 1182 because it would reauthorize the NFIP until Nov. 30, 2018, and provide Congress "with sufficient time to finish its work on a long-term reform measure."

Other bills. As previously reported, several other bills have been introduced in Congress to extend and modify the NFIP. For instance, Rep. Ed Royce (R-Calif) and Rep. Earl Blumenauer (D-Ore) introduced the NFIP Extension and Enhanced Consumer and Community Protections Act of 2018 (H.R. 6402), which is a bipartisan package of bills from the House Financial Services Committee to reform and extend the NFIP. Likewise, Rep. Tom MacArthur (R-NJ) introduced the National Flood Insurance Program Extension Act (HR 6379), which would extend the NFIP through the current hurricane season (see Banking and Finance Law Daily, July 19, 2018).

Companies: American Bankers Association

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