WASHINGTON (5/9/12)--The National Flood Insurance Program (NFIP) is scheduled to expire on May 31, but the Credit Union National Association (CUNA) and others are urging the Senate to reauthorize the NFIP "and avoid the costly consequences that would result in a lapse from failure to act," in a letter sent to elected officials and a full-page ad in D.C. publications.
Sen. David Vitter's (R-La.) S. 2344, would extend the NFIP through the end of this year. The bill is currently co-sponsored by fellow Louisianan Sen. Mary Landrieu (D), and was placed directly on the Senate's legislative calendar. It has not been marked up by the Senate Banking Committee. LEgislation that would extend the NFIP for five years has also been approved in the House and by the Senate Banking Committee.
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Credit unions, as well as other lenders, cannot write certain mortgages without NFIP coverage. In the past the program has lapsed for brief periods--three times in 2010.
The letter, which was sent to Senate Majority Leader Harry Reid (D-Nev.) and Senate Minority Leader Mitch McConnell (R-Ky.), noted that more than 5.6 million policyholders in 21,000 communities nationwide depend on the NFIP as their main source of protection against property losses that result from flooding. "Without flood insurance, many residential and commercial real estate transactions across the country will come to a stop," potentially jeopardizing as many as 40,000 mortgage closings per month, the letter added.
The letter is co-signed by CUNA, the National Association of Home Builders, the Council of Insurance Agents and Brokers, and many other finance, insurance and construction groups. Many of those same associations have teamed up for a pro-NFIP extension advertisement that seeks to remind senators that "floods are not just a coastal issue," and that flood disasters have been declared in every state. "By continuing to ensure access to affordable flood insurance, Congress can provide certainty for the housing market and strengthen our economic recovery," the ad says.
The full-page ad will run through Thursday in Washington political papers Politico, Roll Call, Congress Daily, CQ Today,
and The Hill.
CUNA strongly supports the NFIP program and backs short-term extensions, but also advocates for longer-term approval.
Democrats and Republicans, including Senate Banking Committee Chairman Tim Johnson (D-S.D.) and ranking minority member Richard Shelby (R-Ala.), have agreed that the NFIP is in need of reform, but a comprehensive reform package has not been agreed to in the House or Senate.