Government Affairs: Nation

April 10, 2019

FEMA Risk Rating

FEMA is continuing to work towards Risk Rating 2.0. One argument that has persisted amidst the conversation regarding long term reauthorization is “why do I pay more so rich people can live in harm’s way on the coast and pay less?”  RR 2.0 seeks to address that concern by basing rates for NFIP policies on a parcel by parcel basis considering risk and replacement cost; this is a significant update to its risk modeling that at the time (1968) was state of the art.

This new approach to risk ratings has been the subject of a growing number of articles that have started to raise alarms with states due to the new rates not currently being available – rates are expected to be available in Apr. 2020 and will go into effect in Oct 2020.  In addition, new rates will be implemented over a number of years as rate increases are capped at 18 percent per year, but are on average are only 15 percent.

NAR is actively monitoring and has policy that supports the idea in theory and this will undoubtedly be a hot topic discussed during the Insurance Sub Committee at Midyear. Below is a link to a CBO report on NFIP from 2017.  Check out the county maps on Page 14.  It’s assumed that, county by county, rates will rise and fall according to that map but early estimates suggest, on average, the majority of policyholders will see a savings. CBO Report:

NAR Supports New FHFA Director

NAR recently spearheaded an industry coalition letter to urge the U.S. Senate to confirm Dr. Mark Calabria to be Director of the Federal Housing Finance Agency (FHFA). Dr. Calabria’s decades of experience in housing and finance policy, including through his time spent at NAR, has given him an extensive understanding of the critical role the FHFA plays as both the regulator and conservator of Fannie Mae and Freddie Mac. In this position, Dr. Calabria, who was appointed this month, will be responsible for ensuring a reliable, stable, and liquid housing finance system that provides access to affordable mortgage credit for all creditworthy Americans.

Credit Privacy

Late last month NAR’s Vice Chair for the Federal Technology Policy Committee presented testimony before the Senate Commerce Subcommittee on Manufacturing, Trade and Consumer Protection for the hearing entitled “Small Business Perspectives on a Federal Data Privacy Framework.” She urged the Subcommittee to take into account several key principles and considerations when developing federal privacy legislation. This includes establishing uniform standards for businesses, equal protection for consumers, and direct statutory obligations for all service providers handling consumer data. NAR wants to ensure that any federal legislation on data privacy protects consumers in a nationwide, uniform and consistent way and in a manner that will not impose undue burdens on NAR’s small business members.

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