May 31, 2012

2-month NFIP extension enacted

June 1, 2012 – The president on Thursday signed H.R. 5740, a bill extending the National Flood Insurance Program through July and providing for the gradual phase-out of federal subsidies for flood insurance premiums on second or vacation homes.

The NFIP extension won final House passage late Wednesday on a voice vote.

The subsidy phase-out on coverage for non-primary residences, which will begin next month, was pressed by Sen. Tom Coburn, R-Okla., during Senate consideration of H.R. 5740. Coburn held up the bill initially over the lack of action on a long-term authorization for the NFIP, which Senate Majority Leader Harry Reid, D-Nev., eventually agreed to schedule when the Senate returns from this week's recess.

Coburn later insisted on the subsidy phase-out.It was the one amendment the Senate included in the extension before sending it back to the House.

The passage of H.R. 5740 is yet another short-term fix, and NAFCU is continuing to urge action on a long-term authorization of the program. "Until that happens, lenders and homeowners continue to operate in a climate of uncertainty over the program's next scheduled expiration date," said Brad Thaler, NAFCU's vice president of legislative affairs.

The House cleared H.R. 1309, which would reform the NFIP and authorize it through 2016, last July. A similar measure, S. 1940, introduced by Senate Banking Chairman Tim Johnson, D-S.D., is on the Senate calendar.