Legislative Activity

Financial Services Lawmakers Continue Work on Flood Insurance After Last Week’s Mark-Ups

The House Financial Services and Senate Banking Committees last week advanced various pieces of legislation, including bills that would extend to investment companies operating in Puerto Rico and all the U.S. territories the same rules as those that apply on the U.S. mainland. Additionally, in a rare showing of bipartisanship, both Republicans and Democrats came together to advance bills related to securities and capital formation. The Senate Banking Committee advanced five bills related to the Securities and Exchange Commission (SEC), with only Senators Jack Reed (D-RI) and Elizabeth Warren (D-MA). In the House, the Financial Services Committee approved six bills promoting capital formation, with nearly unanimous support. This simultaneous advancement of bipartisan bills in both chambers may indicate that legislators are willing to pursue financial reform efforts in narrowly focused stages, rather than through a comprehensive package.

Relatedly, last week, Mark Calabria, chief economist for Vice President Mike Pence, suggested that a Treasury-led review of the Dodd-Frank Act (Dodd-Frank) ordered by the White House may conclude that there are parts of the law that are worth keeping. Meanwhile, last Thursday, President Trump met with community bankers to discuss the difficulties they have faced under Dodd-Frank. In interviews with participants, some of the community banking leaders described President Trump as engaged and empathetic to the plight of community banks, willing to address specific concerns while committing to deliver relief as quickly as possible.

In the meantime, members of the Housing and Insurance Subcommittee met last Thursday to examine the National Flood Insurance Program (NFIP) – which is set to expire on September 30th – and discuss the significant reforms needed. Subcommittee Chairman Sean Duffy (R-WI) stated that “a timely reauthorization of the NFIP is the top priority of this subcommittee” and stressed the importance of gaining the Federal Emergency Management Agency (FEMA) perspective on the issues facing the program. Mr. Roy Wright, FEMA’s Deputy Associate Administrator for Insurance and Mitigation, testified last week before House Members and is scheduled to testify before the Senate Banking Committee this Tuesday.

Patrick Kirby is co-author of this article.