Flood Insurance Reauthorization Bill Signed into Law

WASHINGTON-President George W. Bush signed the legislation to reauthorize the National Flood Insurance Program. “On Monday, January 13, 2003, the President signed into law H.R. 11, the National Flood Insurance Program Reauthorization Act of 2003, which retroactively reauthorizes the National Flood Insurance Program as of December 31, 2002, until December 31, 2003,” White House Press Secretary Ari Fleischer said in a statement. The Senate passed the legislation to reauthorize the NFIP by unanimous consent and without amendment Jan. 9. The House passed the two-page bill, co-authored by House Financial Services Committee Chairman Mike Oxley (R-Ohio) and Ranking Member Barney Frank (D-Mass.), by voice vote the previous day. The bill reauthorizes the NFIP through the end of this year and retroactive to Dec. 31, 2002, to include the lapse in coverage when the House during the 107th Congress failed to take it up. The Senate passed a similar bill, sponsored by Senate Banking Committee Chairman Paul Sarbanes (D-Md.) last November. “Property owners and mortgage lenders throughout the country rely on the National Flood Insurance Program to insure their properties against flood damage,” Sarbanes said. “I am pleased that the House and the Senate moved so quickly to restore this program retroactively to ensure homeowners will have insurance available if a flood disaster strikes.” Flood insurance is required for mortgages secured by property in a flood hazard area. The NFIP provides over 90% of the nation’s flood insurance. The credit union community also breathed a small sigh of relief after both chambers approved the bill. NAFCU President and CEO Fred Becker commented, “We strongly support the provision reauthorizing the National Flood Insurance Program retroactive to Jan. 1, 2003. First mortgage real estate loans for federally-insured credit unions moved up nearly 10% or $8.9 billion from $89.1 to $98.0 billion over the first nine months of 2002. For that proportion of loans that are secured by property in special flood hazard areas, it is obviously essential and required by law to have proper flood insurance.” “Many thanks to Chairman Oxley and Ranking Member Frank for sponsoring swift action on this important issue. By making the reauthorization retroactive to last year’s end, we will prevent any interruption in credit unions’ ability to fund loans to members in areas where flood insurance is required,” CUNA President and CEO Dan Mica said. Though it seems banks and credit unions can seldom agree on anything considering their decades long rivalry, the flood insurance reauthorization was something all lenders were awaiting. “This legislation will ensure there are no gaps in flood insurance coverage and will prevent a serious hiccup in the delivery of this valuable program from developing into permanent indigestion,” ICBA Chairman A. Pierce Stone, chairman, president and CEO of Virginia Community Bank, stated. [email protected]