House Passes Another Stop-Gap Flood Insurance Extension; Senate Expected to Follow

July 25, 2018

The House of Representatives passed a measure to reauthorize the nation’s flood insurance program for four months beyond its current July 31 expiration date.

The House measure to renew the National Flood Insurance Program (NFIP) until November 30, 2018, contains no reforms.

The Senate must still act as well to avoid a lapse in the program. A spokesman for Senate Majority Leader Mitch McConnell told the Washington publication The Hill that the Senate would go along. In June, the Senate included a six month NFIP extension in a broad farm bill that is now in conference committee between the two legislative bodies.

Today’s House action was taken over a protest by Rep. Jeb Hensarling, R Tex., chair of the House Financial Services Committee, who argued against another short-term extension without reforms. Congress has passed six short-term extensions of the program; it also let the program lapse in 2017 and 2018.

Hensarling argued the House should force the Senate to vote on reforms.

“I want to make it very clear, Mr. Speaker, I believe this program needs to be re-authorized, and the House has done its work,” he said in remarks on the House floor. “The House passed a bill with reforms last November. Never underestimate the Senate’s capacity to do nothing, and unfortunately the Senate has done nothing. But this is a program, Mr. Speaker, that continues to be in dire need of reform. And now we have re-authorized it without reforms not once, not twice, not three times, not four times, not five times – six times since the Financial Services Committee first reported this bill out. Enough is enough.”

Hensarling reminded his fellow lawmakers that 116 lives were lost last year to flooding and there were billions and billions of dollars of property loss, “[A]nd yet, we have a program unreformed that incents people to live in harm – incents people to live in harm’s way. We should not do this, Mr. Speaker,” the Republican said.

House leadership went ahead with the vote and the four-month stop-gap funding bill passed overwhelmingly, 366-52.

Insurance, banking, consumer and taxpayer groups welcomed the House move to avoid a shutdown on July 31 but joined Hensarling in calling on Congress to address the need for reform of the program.

“It is good news that the House voted to keep the NFIP going, but Americans who face the devastating peril of flooding should be able to hold Congress to a higher standard than simply avoiding a lapse,” commented Jimi Grande, senior vice president, Government Affairs, for the National Association of Mutual Insurance Companies. “The time for doing the bare minimum is long past.”

Lenders warned of the effects on the real state market if the Senate fails to follow through. “If there is a lapse, many loan closings in high-risk areas will be delayed or otherwise complicated, resulting in additional costs and borrower frustrations,” said Rob Nichols, president and CEO for the American Bankers Association.

The Independent Insurance Agents and Brokers of America (Big “I”) also urged prompt action by the Senate to extend the NFIP. “A lapse in the NFIP during the height of hurricane season could impact the ability of the program to promptly pay claims if there is a major flooding event, delay recovery efforts related to the catastrophic 2017 storm season and disrupt real estate markets across the country,” said Jennifer Webb, Big “I” counsel, federal government affairs.

Nat Wienecke, senior vice president of federal government relations at the Property Casualty Insurers Association of America (PCI), had a similar message, noting the while the “four-month extension provides homeowners and businesses with certainty through hurricane season,” Congress should enact reforms that will provide “more consumer options and greater financial stability to the NFIP.”

The environmental and taxpayer coalition SmarterSafer called it “disheartening” that Congress has once again declined to enact reforms to the NFIP, which it noted has borrowed more than $25 billion from taxpayers. “We urge Congress to use the next four months to create a comprehensive legislative package that ensures that the program better protects people in harm’s way, the environment and taxpayers,” the group said.

Topics Flood Politics

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