Program likely to be short-term until Congress OKs fixes
Coast buyers and their lenders are taking risks on properties in special flood hazard areas, the Federal Reserve has warned lenders, because the National Flood Insurance Program has once again lapsed.
The program expired March 28 and won’t be renewed before April 12, when Congress reconvenes. Congress has been unable to agree on long-term reform of the financially troubled program in order to reauthorize it for an extended period. Bills to extend the program for short periods failed to pass the House and Senate before they recessed.
“Hurricane Katrina, in addition to subsequent hurricanes and flooding disasters, exposed weaknesses in the National Flood Insurance Program,” Sen. Thad Cochran, R-Miss, said in a statement to the Sun Herald on Wednesday. “Unfortunately, Congress has not yet been able to reach a consensus on how best to correct those shortcomings. As a result, those who depend on this insurance program have to deal with multiple short-term extensions to the existing program.
“This is not an ideal situation for anyone, but it is likely to remain the status quo until the banking committees in the House and Senate can find a legislative solution to shore up this program.”