WASHINGTON (5/15/12)--Legislation that would provide a short-term extension of the National Flood Insurance Program (NFIP) is expected to be considered by the U.S. House this week, but the NFIP would likely only be extended for a few weeks, Credit Union National Association (CUNA) Senior Vice President of Legislative Affairs Ryan Donovan said.
The NFIP is scheduled to lapse on May 31, and CUNA in a letter sent to Capitol Hill last week urged members of the U.S. Congress to extend the NFIP or reform the program. (See related May 11 News Now story: CUNA calls for NFIP action in letter to Congress)
CUNA last week also joined a coalition of associations representing homebuilders, the insurance industry, other financial institutions, brokers, and others to ask Congress to act on NFIP issues.
Credit unions and other lenders cannot write certain mortgages without NFIP coverage. In the past the program has lapsed for brief periods--three times in 2010.
CUNA in a letter to Congress noted that previous lapses in NFIP authorization have caused significant disruption in the mortgage underwriting process for thousands of prospective homeowners.
Though a comprehensive reform package has not been agreed to in the House or Senate, many Democrats and Republicans have said the NFIP is in need of reform.
Legislation that would extend the NFIP through the end of this year (S. 2344) was introduced recently by Sen. David Vitter (R-La.), and Senate Banking Committee members in a hearing held last week seemed to agree that a long-term reauthorization of the NFIP is needed. Vitter last week said he would offer S. 2344 as a floor amendment.
Legislation that would extend the NFIP for five years has also been approved in the House and by the Senate Banking Committee.