Senators discussed potential reforms to the National Flood Insurance Program while acknowledging the need for a reauthorization to avoid a lapse in the program.
Hearing Details: During a Senate Banking Committee hearing, Chairman Sherrod Brown (D-Ohio) noted there have been 28 short-term extensions of the NFIP since September 2017. He and other members of the panel discussed various NFIP priorities, including eliminating program debt, incentivizing local flood resiliency, addressing rising premiums, and passing a long-term reauthorization to avoid housing market disruptions.
ICBA Statement: In a statement for the record for the hearing, ICBA said:
A long-term reauthorization is needed to bring stability and confidence to the market.
Congress must strike a delicate balance between setting the program on sound financial footing and making sure that rates are affordable.
It supports increased private-market participation as long as community banks are not responsible for certifying that private policies satisfy mandatory purchase requirements and consumers are allowed to return to the NFIP without losing their grandfathered status.
It opposes removing the mandatory purchase requirement for commercial properties, which would put community banks at a disadvantage relative to regional and national banks when competing for loans in flood zones.
Congress should maintain the community bank exemption from creating and maintaining escrow accounts to avoid unnecessary and costly requirements that would drive community banks from the market.
Background: The NFIP is operating under a short-term extension scheduled to expire on March 8. ICBA has repeatedly called on Congress to avoid a lapse in the program while advancing a long-term reauthorization.
