Flood insurance

Lawmakers criticized the Biden administration's Risk Rating 2.0 effort — which was meant to reduce insurance premiums by developing more refined models — as ineffective, arguing that the program has increased rate premiums in vulnerable areas.

Frequent federal budget impasses increase insurance concerns and threaten to jack up financing costs that are already straining lenders.

The indictment of Sen. Bob Menendez, D-N.J., is inconvenient for some Democratic priorities, but unlikely to impact a cannabis banking bill up for debate in the Senate Banking Committee.

Lawmakers on the Senate Banking Committee voiced some scattered support for changes to improve the finances of the National Flood Insurance Program, but comprehensive reform appears out of reach. 

The National Flood Insurance Program has been without a long-term reauthorization for five years, and it seems poised to stay that way after its first congressional hearing since 2019. 

Per bank groups’ request, banking regulators clarified that institutions won’t receive supervisory action for falling short of the guidance.

A congressional hearing on reforming the National Flood Insurance Program focused on whether mortgage companies need to disclose incremental risks even if a homeowner lives outside a federally designated floodplain.

The White House directive may lead regulators to develop new mortgage underwriting standards, stress-test requirements and flood insurance policy, observers said.

Mortgage lenders have much riding on a yearslong effort to overhaul a program that requires homeowners to hold policies in flood-prone areas. A congressional panel meeting to discuss the issue was once again split between lawmakers from storm-threatened states and those concerned about government costs.

The Buffalo, N.Y., bank will pay a $546,000 penalty, which will be passed on to the National Flood Insurance Program to help offset costs.