CUNA reiterated its support for the reauthorization of the National Flood Insurance Program (NFIP) in a letter to House Financial Services Committee leadership Wednesday. The letter was sent for the committee’s hearing on flood insurance reform, and follows a similar letter CUNA sent in May to the Senate Banking Committee for an NFIP hearing.

“CUNA strongly supports your efforts to reauthorize the NFIP later this year," CUNA President/CEO Jim Nussle wrote. "We also recognize that continuing reforms may be necessary to improve the actuarial footing of the NFIP and to ensure stability in the housing market in affected areas. At the same time, it is vital that flood insurance premiums remain affordable so that families in parts of the country where flood insurance is required are not shut out of the opportunity to own a home."

The House Financial Services Committee has produced several legislative drafts for NFIP reform, each addressing an aspect of the program.

CUNA would support efforts to:

• Decrease to 15%, from 18%, the cap on annual rate increases and to limit the chargeable risk premium for any single-family residence to $10,000 per year; and
   
• Increase the transparency of the NFIP, including requiring the Federal Emergency Management Agency administrator to advise the public on its methodology for determining annual risk premium rates for NFIP coverage, as well as various proposals to improve and streamline the flood mapping process.

CUNA also has reservations about a proposal that would increase civil money penalties on federally regulated lenders for failure to comply with the NFIP’s mandatory purchase requirements to $5,000, up from $2,000.

"We believe the burden associated with compliance with flood insurance regulations is already too high, particularly for smaller lenders, and any increase in civil money penalties would increase this burden even further," Nussle wrote.

Additional information, and a link to the letter, can be found on CUNA’s Removing Barriers Blog.