The Senate has paired the flood insurance bill (S. 1846 The Homeowner Flood Insurance Availability Act) and the NARAB II bill (S.534 National Association of Registered Agents and Brokers Reform Act), meaning that they will be considered together as a package.
There is a time agreement for debate of both the flood bill (Menendez) amendments and the NARAB II bill (Testor/Johanns). It’s not clear when the bill will be called up for debate but now that there is a time agreement there is no question the Senate will consider the issue on the floor.
The ABIA-opposed Coburn amendment on allowing states to opt out of NARAB is in order and will be considered; and, the Merkley amendment, also opposed by ABIA, on forced-placed insurance, which would extend the FHFA’s prohibition on commission and reinsurance revenue from GSE mortgages to all mortgages, will be debated too. Merkley will also prohibit insurers from providing free tracking and administration services to servicers.
There is an ABIA-supported 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.
In addition, Sen. Hagan has introduced an amendment that clarifies that only first liens must have escrow requirements associated with them. ABIA supports this amendment as well.
After the Senate vote, we may face some choices about how best to proceed in the House. We may have a flood bill that provides the relief on premiums we support and some clarification on private flood policies and escrow requirements. It very well may contain harmful requirements on force-placed insurance.
NARAB II will hopefully come out without the Coburn language, but at this time there is no guarantee. NARAB II would be instantly subject to conference between House and Senate since the House passed it already. The flood bill, in order to be enacted, would need the House to act by passing something similar to the Senate bill.
As the votes progress, we will continue to provide updates. Both bodies are adjourned next week.