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February 16, 2012

41 senators urge action on NFIP

A bipartisan group of 41 senators has urged Senate Majority Leader Harry Reid, D-Nev., and Minority Leader Mitch McConnell, R-Ky., to move a long-term reauthorization of the National Flood Insurance Program to a vote "as expeditiously as possible in February" or soon after.

Reid is sponsor of S. 1940, a five-year extension that was reported out of the Senate Banking Committee Dec. 5. In the House, H.R. 1309 was cleared on a vote of 406-22 July 12. The bills are not identical, but both would reauthorize the NFIP through fiscal 2016.

The program received a short-term extension with the end-of-year budget deal; that extension ends May 31.

Credit unions rely on the NFIP to meet federal flood insurance requirements for properties that serve as loan collateral but are located in a flood plain. If the borrower allows a policy to lapse on a covered property, the credit union must force-place the coverage. When the program lapses, however, the NFIP cannot issue new policies or authorize any increases in coverage.

The NFIP was last reauthorized in 2004 and has been operating under a series of short-term extensions since 2008. NAFCU is continuing to urge Congress to act and remove the uncertainty for lenders and borrowers over whether a property will have the coverage it needs when disaster strikes.

The letter to Reid and McConnell was sent Feb. 13; S. 1940 has been waiting for Senate actionfor more than two months. Led by Sens. Jon Tester, D-Mont., and David Vitter, R-La., the 41 signatories to the letterurged that given the strides made so far, they "believe that that passage of a comprehensive, bipartisan flood reauthorization bill is within reach, and we respectfully urge you to schedule such a debate."