WASHINGTON, D.C. – U.S. Senators Thad Cochran and Roger Wicker today welcomed the finalization of federal regulations that will allow Mississippi communities to apply to have loans associated with Hurricanes Katrina and Rita forgiven.
The Federal Emergency Management Agency (FEMA) today announced that it has completed its work to establish a loan forgiveness program for the Gulf Coast, as authorized by Congress after it became apparent that loan forgiveness was not included in the 2005 law that established specific recovery loans for the Gulf Coast. Congress rectified that inequity in 2007.
The rulemaking process got underway in March 2009 to determine the guidelines for forgiving loans in cases of significant community hardship. Both Cochran and Wicker had pressed the Department of Homeland Security to move forward to complete and implement the loan forgiveness regulations.
“Many Mississippi communities that received disaster loans have been in financial distress since Hurricane Katrina. Their financial standing, credit worthiness and ability to provide basic services have been made more difficult as they have waited for FEMA to establish this loan forgiveness program,” said Cochran, who serves on the Senate Homeland Security Appropriations Subcommittee and is scheduled to meet with the FEMA Administrator next week. “Now that the rules are set, I expect FEMA to do its best to expeditiously process loan forgiveness applications so that these communities can more fully recover from these catastrophic storms.”
“I talked with FEMA officials this morning and have been on the phone with mayors and community leaders from the Gulf Coast all day letting them know the good news. I appreciate FEMA finally providing a mechanism for financial relief to our cities and counties that are still recovering from the worst national disaster in our nation’s history,” Wicker said. “Loan forgiveness has long been a priority, as it represents a critical step in completing the Gulf Coast’s rebuilding efforts. Now that FEMA is finally moving forward with this congressional mandate, my Gulfport office is ready to help community leaders navigate through the forgiveness process.”
The rules announced today will amend FEMA’s Special Community Disaster Loan (CDLs) regulations to include loan forgiveness procedures and requirements for Hurricanes Katrina and Rita. Under the new regulations, a local government that received CDLs from FEMA following Hurricanes Katrina and Rita can apply for forgiveness of all or part of those loans if its revenues in the 36 months following the hurricanes were insufficient to meet its budget requirements.
FEMA will begin working with the Mississippi Emergency Management Agency next week to begin the implementation process. Prior to the mid-March timeline for accepting applications, FEMA also plans to meet with communities to review documentation requirements and procedures. The CDL rule will be available online on Tuesday, Jan. 19, at http://www.gpoaccess.gov/fr/index.html.