REALTORS® Reverse FEMA Flood Insurance Suspension Within Days of Dubious Shutdown

REALTORS® Reverse FEMA Flood Insurance Suspension Within Days of Dubious Shutdown

February 2019

In Washington, it’s who you know, what you know, and how you use it that matters.  And when a significant number of those ‘whos’ are furloughed by the federal government, it makes navigating any given federal policy crisis that much more challenging.

Such was the case on Christmas Eve, when the National Association of REALTORS® was tipped off that the Federal Emergency Management Agency (FEMA) would be suspending National Flood Insurance Program (NFIP) operations during the government shutdown – this, after Congress and the President had enacted legislation reauthorizing the NFIP through May 31.  NAR’s advocacy team flew in to action calling contacts, developing strategies, and gathering data.  They were able to bring about a full reversal of the decision, says Senior Policy Representative Austin Perez, because of the depth of knowledge, resources, and relationships that the association has in place.

Two days before FEMA publicly announced the NFIP suspension, Perez was able to confirm the rumor of the program’s impending closure, but not through FEMA, most of whose staff was furloughed at the time. Instead, Perez turned to the insurance agents who sell the policies for FEMA and thus would be the first notified of any NFIP operational change.  Indeed, FEMA had directed these agents to stop selling NFIP insurance while government attorneys determined the legality of NFIP operating under the Anti-Deficiency Act – the law generally barring federal agencies from operating during a lapse of appropriations.

Having identified the problem, Perez mobilized the advocacy team to find a solution. Legislative research revealed that the Anti-Deficiency statute had not applied to NFIP during previous shutdowns because the program is funded by policy-holder premiums, not annual appropriations.  A post on the Hub brought in real-time data on affected home sales from NAR’s volunteer leaders, whose networks reported hundreds of stalled sales per day.  “We were able to respond to the government attorneys with actual data and legislative history and put this information in the hands of policy makers in less than twenty-four hours,” says Perez.

Armed with data and proof of precedent, the team of lobbyists led by Shannon McGahn, NAR’s Senior Vice President of Government Affairs, used their access to the White House and Congress to apply pressure on the government attorneys who had determined that NFIP would be shut down along with the government.  Meanwhile, virtually all of the housing industry’s financial services groups, including insurers and lenders, joined NAR in issuing statements criticizing the questionable FEMA decision.

Within days, FEMA issued a statement resuming operations and retroactively covering the tumultuous week of insurance insecurity.  “It was only because of our strong and longstanding relationships in the government, within the insurance industry, and most especially among our own active volunteer leadership, that we were able to mobilize so quickly to resolve the crisis,” says Perez.  “Faced with real-time evidence and the impact on the national economy, it was a no-brainer for our federal policy makers.  We’re grateful to all our members who overwhelmingly responded to our call for home-sales evidence during that eventful stretch of the holidays.  The system worked!”

To learn more about how the National Association of REALTORS® used its contacts, savvy, and industry expertise to convince FEMA to reverse its surprise decision and reinstate the National Flood Insurance Program, contact Austin Perez, Senior Policy Representative, at or 202.383.1046.

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