Both the House and the Senate Friday passed bipartisan legislation that includes a five-year extension of the National Flood Insurance Program. The House passed the bill with a 373 to 52 vote, while the Senate passed the bill 74-19. The package awaits signature by President Obama; he is expected to sign it over the weekend.

Among the reforms are those that eliminate subsidized flood insurance rates for vacation and second homes, properties with repetitive flood claims and commercial properties.

 “Today's action by the Congress provides credit unions with certainty for the future of the National Flood Insurance Program for the foreseeable future. CUNA and credit unions have been encouraging Congress to approve a multi-year authorization for several years for this important program,” said CUNA President/CEO Bill Cheney.

Cheney said the NFIP was been subjected to nearly a dozen short-term extensions since the last time it was granted a long-term extension. In some instances, Congress has allowed the program to lapse, which had complicated the mortgage lending process.

“Congress' action will ensure that credit unions – and the consumers that they serve – can have a much greater degree of confidence in the lending process and the prospect of financing their homes,” Cheney said.

The bill was introduced by Rep. Judy Biggert (R-Ill.), who serves as Chairman of the House Financial Services Subcommittee on Insurance, Housing and Community Opportunity.  According to a House release, the bill has been a priority for the Republican leadership of the Financial Services Committee since they gained control of the panel in January 2011.  The bill passed the House nearly a year ago, but progress on the final version of the bill was slowed in the Senate.

Without action by Congress, the NFIP would have expired July 31 and left millions of homeowners, renters and businesses without a way to insure their properties against devastating floods.  Since 2008, Congress has passed 17 short-term extensions of the NFIP and allowed the program to lapse four times.  More than 40,000 home sales were stalled during the program's most recent lapse in June 2010, according to the National Association of Realtors.

“NAFCU has been an active advocate for long-term reauthorization of the NFIP, which is vitally important to the U.S economy and homeowners nationwide. The passage of this bill will boost confidence in the housing market for lenders and homeowners,” said NAFCU President/CEO Fred Becker, Jr.

Other provisions in the omnibus package include highway funding and a one-year extension of the current, 3.4% rate cap on federally subsidized Stafford education loans. The Stafford loan rate cap was scheduled to double to 6.8% July 1 without congressional action.

Both the House and the Senate are in recess next week in observance of the Independence Day Holiday July 4.