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Friday, January 24, 2014

Flood Insurance Reform and Producer Licensing Modernization

When the Senate returns January 27, we expect that the majority and minority leaders of the Senate will have reached a time agreement about how to proceed with debate on S. 1846 The Homeowner Flood Insurance Availability Act and S.534 National Association of Registered Agents and Brokers Reform Act.  They will have also made choices about what amendments that debate will address.

ABIA members should be aware of four amendments that we know about so far:
  1. With respect to S. 534, ABIA opposes Senator Coburn's amendment which would allow states to opt out of NARAB and thus, undercuts the goal of uniform and national producer licensing.
  2. With respect to S. 1846, ABIA opposes the Senator Merkley's amendment on forced-placed insurance, which would extend the FHFA’s prohibition on commission and reinsurance revenue from GSE mortgages to all mortgages. This amendment would also prohibit insurers from providing free tracking and administration services to servicers.
  3. ABIA does support an amendment from Senators Lee and Hiller that would define private flood insurance in a manner consistent with the ABIA's goal of having the banking regulators accept private policies in place of NFIP policies.
  4. ABIA also supports the Senator Hagan's amendment that clarifies that only first liens must have escrow requirements associated with them.
There is a procedural hurdle in the Senate that has policy consequences for these bills of which ABIA members should be aware. Right now, leaders in both parties are attempting to determine if they will agree to a Unanimous Consent (UC) request on Jan. 27th to take up the amended bills and permit votes on an agreed upon list of amendments, some of which are described above. If UC can be obtained, then the cloture petition will be set aside and the Senate will proceed immediately to debate the bill and the amendments – and votes on the amendments and final passage of the bill, as amended, will be taken.

If UC cannot be obtained (if a Senator objects to the UC request), then the Senate will vote on the cloture petition. It takes 60 votes to ‘invoke cloture’. If cloture is invoked, the Senate will move to debate and vote on the bill (as introduced) but will not consider any amendments. This is important as it means that the NARAB II bill will get an up or down vote without the offending Coburn provision but the flood reform bill will also get an up or down vote without the benefit of adding the Lee/Hiller and Hagan amendments, which we support.

ABIA members are invited to join us for a members-only review of these two issues today, Friday 1/24 at 11:00 AM, EST in the ABIA GR Working Group call. If you are an ABIA member, contact Renee Galbraith for your invitation and the call-in information.