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NAFCU's Brad Thaler, in a letter ahead of today's House Financial Services Committee mark-up on flood insurance reauthorization, said the association supports a number of provisions but is concerned that increased privatization of the NFIP would have an adverse impact on premiums and rates.

Without reauthorizing legislation, the National Flood Insurance Program is due to expire at the end of September. In a letter to committee Chairman Jeb Hensarling, R-Texas, and Ranking Member Maxine Waters, D-Calif., NAFCU Vice President of Legislative Affairs Brad Thaler said NAFCU is committed to seeking long-term authorization for the program.

"NAFCU is committed to working with the committee to achieve long-term reauthorization of the NFIP before the September 30, 2017 deadline," said Thaler.

Specifically, he said NAFCU supports a number of improvements in the legislation, including:

• transparency of NFIP premium rates and methodologies;
• increasing coverage limits for both property and structures;
• capping annual risk premiums at $10,000;
• decreasing annual rate increase caps to 15 percent;
• addressing the need for improved technology and expediency of mapping efforts; and
• taking steps to maintain the financial solvency of the program and market stability.

However, Thaler said NAFCU has concerns with "drastically increased NFIP privatization efforts," which would "cherry pick" low-risk policies and put the burden on the federal government to become the insurer of last resort for high-risk policies. He said that would impact premiums and rates and could make flood insurance unaffordable for those who need it most.

Thaler added that raising civil penalties from $2,000 to $5,000, as proposed, would increase the compliance burden on small lenders, making it more difficult for credit unions to serve their members.

In all, seven bills addressing various aspects of the NFIP, rates and risk mitigation are listed for today's mark-up session, which is set to begin at 10 a.m. Eastern.

A Senate version of NFIP reauthorization was introduced Tuesday by Sens. Bob Menendez, D-N.J., and John Kennedy, R-La., and awaits further action. Both Menendez and Kennedy are on the Senate Banking Committee.