NAFCU Letter to Senate Supporting Extension of National Flood Insurance Program

June 26, 2012

The Honorable Harry Reid                                   
Majority Leader                                                  
United States Senate                                           
Washington DC 20510                                        

The Honorable Mitch McConnell
Minority Leader
United States Senate
Washington DC 20510

Re:Support for S. 1940 and long-term reauthorization of the National Flood Insurance Program

Dear Majority Leader Reid and Minority Leader McConnell:

On behalf of the National Association of Federal Credit Unions (NAFCU), the only trade association exclusively representing the interests of our nation’s federal credit unions, I write today in support of legislation (S.1940) expected to be taken up on the Senate floor this week, which would extend the National Flood Insurance Program (NFIP) through 2016.

With the NFIP currently operating on a short-term extension scheduled to expire at the end of next month, NAFCU appreciates the urgency with which the Senate is acting to prevent this vital program from lapsing.  Often times during lapse periods, credit unions are required to keep up with notices to members about flood insurance requirements, but the NFIP is unable to approve new policies and coverage increases.  This high level of uncertainty leaves millions of American families who rely on flood insurance in limbo.

NAFCU has consistently supported bipartisan reform legislation aimed at making structural changes to the NFIP and paving the way for a longer-term reauthorization.  While NAFCU member credit unions recognize the importance and fragility of many of the reform provisions contained in S.1940, it is clear that long-term stability in the program is long overdue and must be achieved.  As you know, last year the House passed its own long-term NFIP package (H.R. 1309) by an overwhelming bipartisan vote.  NAFCU is hopeful that the Senate is poised to do the same and that the bills can be worked out through a conference committee prior to the July 30th deadline.

Finally, NAFCU would like to reiterate its support for including in any final NFIP bill the language from the House version of the legislation, which would clarify the existing law allowing lenders to collect premiums for force-placed flood insurance during the 45-day notification period should borrowers let policies lapse.  We believe that this is an issue of fairness given that credit unions participating in the NFIP continue to assume the risk of property damage during this delinquency notification window. Accordingly, we would support the Senate including this House amendment in any final NFIP bill that gets enacted.

We strongly urge you to move forward with plans to consider S. 1940. Should you have any questions or require additional information, please do not hesitate to contact myself or NAFCU’s Vice President of Legislative Affairs, Brad Thaler, at (703) 842-2204.

Sincerely,                                                                                                                                   

B. Dan Berger
Executive Vice President, Government Affairs

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