Lawmakers hit standstill on flood insurance reform

Look to create bipartisan reform

Both Democrats and Republicans agree the National Flood Insurance Program is in need of reform, however, they disagree on how exactly to accomplish it.

The House Financial Services Committee held a hearing Wednesday entitled Preparing for the Storm: Reauthorization of the National Flood Insurance Program, in order to discuss the issue and hear from subject experts.

The witnesses for the hearing included:

  • Maria Cox Lamm of South Carolina Department of Natural Resources
  • Christopher Heidrick of Heidrick & Company Insurance and Risk Management Services
  • Velma Smith of The Pew Charitable Trusts
  • Mabél Guzmán of the National Association of Realtors
  • Collin O’Mara of National Wildlife Federation
  • Raymond J. Lehmann of Street Institute

"I have long advocated for a long-term reauthorization of the NFIP in order to provide certainty in the housing market,” Committee Chair Maxine Waters, D-CA, said in her opening statement. “Unfortunately, the NFIP has been carried along through 10 short-term extensions since Fiscal Year 2017, and has even experienced brief lapses during that time.”

“This haphazard approach to legislating puts communities at risk and undermines the health of our housing market,” Waters said. “The NFIP’s authorization is currently set to expire on May 31, 2019, and I believe that we will break this cycle.”

And one witness in the hearing pointed out the importance of reforming the NFIP, saying it is not sustainable in its current form.

“The embattled National Flood Insurance Program is central to U.S. disaster preparedness efforts,” Guzmán said in her testimony. “According to NAR research, the program is also essential to completing half-a-million home sales per year, each of which contributes two jobs and $80,000 to America’s economy.”

“However, the NFIP was not designed nor intended to address the catastrophic loss years we have seen since 2005, meaning the program is not sustainable as currently structured,” she said.

The NFIP was established in 1968, and authorization for the program is administered by Federal Emergency Management Agency.

According to FEMA’s website, “The National Flood Insurance Program aims to reduce the impact of flooding on private and public structures. It does so by providing affordable insurance to property owners and by encouraging communities to adopt and enforce floodplain management regulations.”

For several years now, the program has been given short-term reauthorization as Congress has yet to agree on a path for reform.

And while members of Congress seem ready to work together, conflicting views from both parties could get in the way.

While Republicans support more private involvement in the flood insurance market, which they say will give citizens more options and lowered costs amid increased competition, Democrats want to expand the government's role in NFIP.

But can they push their differences aside and push out sustainable reform to protect Americans in flood zones?

The clock is ticking. The current short-term extension for the program expires May 31, 2019.

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