Banking and Finance Law Daily House committee passes housing rights, flood insurance bills
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Thursday, June 13, 2019

House committee passes housing rights, flood insurance bills

By J. Preston Carter, J.D., LL.M.

The House Financial Services Committee passed legislation intended to reform the National Flood Insurance Program, protect housing rights, and strengthen the financial system.

The House Financial Services Committee held a markup and passed eight bills affecting the National Flood Insurance Program, homeownership, the Department of Housing and Urban Development, and illicit use of the financial system. The committee press release notes that these measure include:

  • The National Flood Insurance Program Administration Reform Act of 2019 (H.R. 3111)—bipartisan legislation that makes much-needed improvements to the National Flood Insurance Program’s appeals and litigation process following the numerous flaws identified in the oversight, accountability, and transparency of the claims process in the aftermath of Superstorm Sandy.
  • The National Flood Insurance Program Reauthorization Act of 2019 (H.R.3167)—bipartisan legislation that reauthorizes the NFIP for five years and also includes a number of reforms to increase affordability, improve mapping, enhance mitigation, and modernize the NFIP.
  • The Housing Financial Literacy Act of 2019 (H.R. 2162)—legislation that requires HUD to provide a 25-basis-point discount in upfront Federal Housing Administration single-family mortgage insurance premiums for first-time-homebuyers who complete a housing counseling program to help them sustain homeownership.
  • The Corporate Transparency Act of 2019 (H.R. 2513)—bipartisan legislation that requires corporations and limited liability companies to disclose their beneficial owners to the Financial Crimes Enforcement Network, ending criminals’ ability to use anonymous shell companies to hide their money and illicit activities.
  • The Keeping Families Together Act of 2019 (H.R. 2763)—legislation that blocks HUD from implementing a proposed rule that would terminate housing benefits for families with mixed-immigration status, resulting in evictions and family separations.
  • The Ensuring Equal Access to Shelter Act of 2019 (H.R. 3018)—legislation that blocks HUD from implementing a proposed rule that would allow shelter providers to deny transgender and gender non-conforming people equal access to homeless shelters.
  • The FHA Loan Affordability Act of 2019 (H.R. 3141)—legislation to make homeownership more affordable for Federal Housing Administration borrowers by repealing the requirement that borrowers with FHA loans pay mortgage insurance premiums for the full life of the mortgage, and reinstating the FHA’s previous policy of requiring FHA borrowers to pay premiums only until the outstanding principal balance of the loan reaches 78 percent of the original home value.
  • The Homeownership for Dreamers Act (H.R. 3154)—legislation to clarify that Deferred Action for Childhood Arrivals (DACA) recipients cannot be denied mortgage loans backed by the FHA, Fannie Mae, Freddie Mac or the U.S. Department of Agriculture solely on the basis of their DACA status.

A Minority press release commended the bipartisan support for the two pieces of legislation to reauthorize the NFIP through Sept. 30, 2024, and "implement much-needed reforms to the outdated program." Ranking Republican member Patrick McHenry (R-NC) applauded Chairwoman Maxine Waters’ (D-Calif) "willingness to work in a bipartisan manner." Both measures passed unanimously.

Rep. Nydia M. Velazquez (D-NY) praised the passage of the National Flood Insurance Program Administration Reform Act, which she introduced, saying it will "better help policyholders receive compensation under their policies after flooding damage" by enacting "new transparency requirements and imposing penalties on unscrupulous insurance companies."

The American Bankers Association also released a statement on the NFIP reauthorization bill, saying it would introduce a "continuous coverage" provision that allows borrowers leaving the program to purchase private flood insurance to return to the NFIP without penalty. It also appreciated that the bill would address affordability issues and improve the flood mapping program and floodplain management and mitigation.

In her press release, Rep. Carolyn B. Maloney (D-NY) said the measure she introduced, the Corporate Transparency Act, "will crack down on money laundering in the U.S. through anonymous shell companies by requiring companies to disclose their true, beneficial owners at the time the company is formed to prevent bad actors from using anonymous shell companies to thwart law enforcement and hide their illicit activities." The bill passed by a bipartisan vote of 43 to 16.

"We cannot allow mortgage lenders to continue to discriminate against Dreamers. Like any other young person contributing to our country, Dreamers deserve the opportunity to own a home," said Rep. Juan Vargas (D-Calif), who thanked the Committee for its support of the bill he introduced, The Homeownership for Dreamers Act, which passed by a bipartisan vote of 33 to 25.

Companies: American Bankers Association; Fannie Mae; Freddie Mac

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