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House Prepares to Extend Terrorism Insurance Program With Reforms, Clarify Mistake in Dodd-Frank

Washington, Dec 10 -

The House today will vote on legislation extending the Terrorism Risk Insurance Act (TRIA) for six years and include reforms designed to lessen the financial cost taxpayers would face in the event of a terrorist attack.

The bill preserves several non-TRIA related pieces of legislation contained in the Senate bill as well as what House Democrats have previously described as a "technical fix" and "clarification" to a certain provision of the Dodd-Frank Act.

Democrat Maxine Waters, the ranking member of the House Financial Services Committee, called the same Dodd-Frank language that's included in the TRIA reauthorization “a truly technical fix” that “would clarify the intent” of Dodd-Frank when the House debated it as a separate bill last year.

That bill was overwhelmingly approved by the House 411-12, with 181 Democrats joining all Republicans in voting for it.

Ranking Member Waters and fellow committee Democrat Carolyn Maloney, who earlier characterized the Dodd-Frank clarification that's now in the TRIA bill as an effort to correct “a drafting error in Dodd-Frank” and “not an attempt by opponents to weaken the safeguards,” reiterated their view before the House Rules Committee on Tuesday.

Chairman Jeb Hensarling (R-TX) hailed the legislation not only for its multi-year extension of TRIA but also for the taxpayer protection reforms it includes. 

“Democrats and Republicans overwhelmingly support a long-term reauthorization of TRIA, and I’m very pleased this is that long-term reauthorization that I and many others have sought.  In addition, this legislation advances the cause of taxpayer protection.  It includes reforms that double the amount of losses from a terrorist attack that would result in a government backstop and it actually ensures – for the first time in the program’s history – that the taxpayers are compensated for the government’s use of their hard-earned dollars.  That might be an uncommon concept on Wall Street or in Washington, but it’s a common sense concept for all who are on Main Street.”

Chairman Hensarling also noted that the technical clarification to Dodd-Frank “would clarify that Main Street businesses, farmers and ranchers – who had nothing to do with the 2008 financial crisis – will no longer be subject to an onerous misinterpretation of the language of Dodd-Frank.  Both former Chairman Barney Frank and former Chairman Chris Dodd, as well as the current Ranking Member, have said this misinterpretation is a mistake.

“This is a very technical clarification to what we call the end-user provision, which is perhaps the most expensive and unnecessary regulation that Americans have never heard of,” said Chairman Hensarling.