Congresswoman Maxine Waters (D-CA), Ranking Member of the House Financial Services Committee, responded to two separate reports released today from the Government Accountability Office and the Federal Emergency Management Agency on flood insurance affordability and options for providing assistance to policyholders.
Waters requested the GAO report in 2014 after FEMA failed to complete a congressionally-mandated affordability study. As a result, when FEMA increased premiums pursuant to the 2012 Biggert-Waters Flood Insurance Reform Act it lacked an understanding of the impact of those increases on the affordability of flood insurance. In 2014, Waters led the bipartisan effort to provide relief for policyholders through the Homeowner Flood Insurance Affordability Act (HFIAA). The act renewed Congress’s call for a substantive study of affordability – the second part of which FEMA released today – and included a new requirement for FEMA to follow the study with an affordability framework that includes proposals and proposed regulations for ensuring flood insurance affordability among low-income populations. To date no affordability framework has been submitted.
The reports from GAO and FEMA confirm what was feared all along: FEMA does not have the income or flood-risk data to be able to inform Congress’s decisions on affordability assistance.
“Rising flood insurance rates are a burden on homeowners who can’t afford higher premiums and I am continuing to look closely at ways to fix this problem,” Ranking Member Waters said. “However, I am concerned that the information gap at FEMA is an impediment to enacting meaningful reforms to provide further relief to those who need it most. These reports show that there are workable solutions but that Congress cannot adequately assess the full effects of affordability proposals with insufficient data. I will continue to call on FEMA to prioritize these issues so that proposals can be considered ahead of the 2017 reauthorization of the National Flood Insurance Program.”
The reports highlighted several ways to target assistance to those with financial need, such as a means-tested program. However, they found that that FEMA does not have a way to collect income information for policyholders who are currently receiving subsidies, nor does it collect data that would be needed to calculate the full-risk rate for those properties. Without this information, Congress cannot fully estimate the costs of the proposals and FEMA cannot fully implement them.
For months, Waters led a bipartisan effort to provide homeowners with flood insurance rate relief and to bring accountability to FEMA. HFIAA passed the House on March 4 and the Senateon March 13 and was ultimately signed into law on March 21. The law made clear that addressing affordability was to be a top priority of the NFIP. In addition to her leadership on HFIAA, Waters has continued to call for prioritizing affordability and recently sent a letter to FEMA Administrator Fugate urging him to provide Congress a robust affordability framework in a timely manner.