Landrieu's Law Cancels More than $13.6M in Community Disaster Loans From Katrina for St. Bernard Parish

Press Release

St. Bernard Sheriff's Department $9-million loan, St. Bernard Parish School Board $4.5-million both completely cancelled

As the Gulf Coast marks the ninth anniversary of Hurricane Katrina and the failure of the federal levee system, U.S. Senator Mary L. Landrieu, D-La., today announced that more than $13.6 million in community disaster loans (CDLs) made after Hurricane Katrina in St. Bernard Parish have been cancelled thanks to the laws she passed in 2007 and 2013. That includes a $9-million loan to the St. Bernard Parish Sheriff's office and a $4.5-million loan to the St. Bernard Parish School Board.

Sen. Landrieu's second law she passed in 2013 built on the original cancellations and changed the flawed formula FEMA was using that failed to recognize necessary expenses; penalized communities for revenues that are otherwise dedicated; and omitted budgetary circumstances beyond the three-year period following the disaster.

"St. Bernard Parish suffered once from Katrina, but then it suffered again when the federal government saddled its schools and Sheriff's department with unfair debt. But with years of persistence and support from St. Bernard Parish leaders, we worked together to create a commonsense formula that has rightly cancelled more than $1.8 million in community disaster loans from Hurricane Katrina. With this fix, St. Bernard Parish can invest in providing quality education for our children, prevent layoffs, keep its communities safe and build a prosperous future that all our families can count on," Sen. Landrieu said.

How Sen. Landrieu did it:

The 2007 law by Sen. Landrieu canceled an initial $146 million in loans, but FEMA was using a flawed formula that failed to recognize necessary expenses; penalized communities for revenues that are otherwise dedicated; and omitted budgetary circumstances beyond the three-year period following the disaster. In December 2012, as the Senate worked on a disaster relief package for communities and regions hard hit by disasters in 2012, Sen. Landrieu included language to cancel the remaining loans in the bill the Senate passed. The bill, however, died as a result of House inaction. When the House passed a smaller disaster relief package, in January 2013, it stripped this provision from the bill. Finally, in March 2013, Sen. Landrieu added the fix to the bill that funds the day-to-day operations of the federal government.

Sen. Landrieu had time and time again sought legislative and other solutions to help affected communities with outstanding loans. In 2007, Sen. Landrieu authored a provision to restore the possibility of loan forgiveness and nullify Republican legislation in 2005 that made forgiveness outright impossible under any circumstances. Without this legislation, these communities would have had to repay every penny. As a result of Sen. Landrieu's 2007 provision, FEMA previously cancelled $602 million in debt that Louisiana communities (approximately 60 percent) would otherwise be required to repay under the Republican legislation that originally authorized the loans.

In 2010, Sen. Landrieu convened a three-hour meeting with FEMA Administrator Craig Fugate and representatives from eight Louisiana parishes in her office to explain to FEMA officials how the formula did not accurately calculate a parish's revenue and expenses for determining whether an applicant met the forgiveness requirements.

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