WASHINGTON, DC (June 14, 2017) — National Association of Federally-Insured Credit Unions (NAFCU) Vice President of Legislative Affairs 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.,” 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,” he added.
Specifically, he said NAFCU supports a number of improvements in the legislation, including:
However, Thaler noted NAFCU’s concerns with “drastically increased NFIP privatization efforts,” that 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.
Below please see full text of letter:
June 13, 2017
The Honorable Jeb Hensarling
Chairman
House Financial Services Committee
United States House of Representatives
Washington, D.C. 20515
Dear Chairman Hensarling and Ranking Member Waters:
On behalf of the National Association of Federally-Insured Credit Unions (NAFCU), the only trade association exclusively representing the federal interests of our nation’s federally-insured credit unions, I write in conjunction with tomorrow’s mark up of National Flood Insurance Program (NFIP) legislation. NAFCU is committed to working with the committee to achieve long-term reauthorization of the NFIP before the September 30, 2017 deadline.
NAFCU is pleased to see the following program improvements included in the legislation:
NAFCU has concerns with the drastically increased NFIP privatization efforts, as a private program 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. This would impact premiums and rates across the risk pool, making flood insurance unaffordable for those who need it most. This problem would be further exacerbated by the removal of the non-compete requirement of Write-Your-Own providers, and could lead to abuses in the system.
The driving mission of credit unions is to focus on serving their members and to ensure their financial wellbeing. The proposal to increase civil penalties from $2,000 to $5,000 would further increase the NFIP’s regulatory-compliance burden on small lenders; making it more difficult for credit unions to serve their members. Additionally, allowing for under-insurance, or coverage for replacement cost value, places financial institutions in a difficult position and in the event of a major disaster could jeopardize the financial soundness of an institution.
We thank you for the opportunity to provide input on these proposals and look forward to working with you to ensure the reauthorization of the NFIP before the September 30, 2017deadline. Should you have any questions or require any additional information please do not hesitate to contact Gaurav Parikh, NAFCU’s Associate Director of Legislative Affairs, at 703-842-2261.
Sincerely,
Brad Thaler
Vice President of Legislative Affairs
cc: Members of the House Financial Services Committee
The National Association of Federally-Insured Credit Unions is the only national trade association focusing exclusively on federal issues affecting the nation’s federally-insured credit unions. NAFCU membership is direct and provides credit unions with the best in federal advocacy, education and compliance assistance. For more information on NAFCU, go to www.nafcu.org or @NAFCU on Twitter.
