The American Bankers Association today called for long-term reauthorization of the National Flood Insurance Program ahead of a House Financial Services hearing on the program this week. According to association, the ongoing series of short-term extensions of program authority and the potential for lapses in authority can destabilize the mortgage process. Additionally, the NFIP is “essential” to ensure borrowers in flood-prone areas can access mortgage collateral and insurance to protect their properties, ABA noted.
ABA urged the committee to advance legislation to reauthorize the program on a five-year basis and to include a requirement for the regulating agencies to update the interagency questions and answers regarding flood insurance on a regular basis.
“There is a growing focus by banks and regulators to ensure that physical risks posed by climate change are adequately addressed,” ABA wrote. “The availability of flood insurance, and particularly the NFIP, is an essential element of those efforts. Long-term reauthorization of the program is vital to a coordinated approach to ensuring resiliency of the housing finance system and to the continued ability of low- and moderate-income borrowers to access mortgage credit.”
