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FEMA Plans To Waive Debts of Katrina Victims

AP | 2/8/2012, 5:43 p.m.

Davida Finger, a law professor at Loyola University in New Orleans who has helped several people appeal their debts, said it's "absolutely unclear" how FEMA will decide whether an improper payment resulted from a mistake by the agency or the recipient.

"There seems to be a lot of subjectivity and discretion in making these decisions," she said.

One of Finger's clients is David Bellinger, a 63-year-old blind man who rented an apartment in Atlanta after Katrina wrecked his New Orleans home. FEMA has asked Bellinger to pay back more than $3,200 in federal aid he received to help pay his rent. The agency claimed he received a duplication of benefits. Bellinger says the agency is mistaken, but FEMA rejected his appeal in December.

"The people who can least afford to pay this money back are being hardest-hit by this," Finger said.

Landrieu said the waiver provision had encountered some opposition before a compromise measure was approved by Congress.

"This was not easily done," she said. "There was some pushback about doing any forgiveness whatsoever."

Sen. Mark Pryor, an Arkansas Democrat who wrote the provision, said FEMA has significantly improved its process for distributing disaster aid since Katrina.

"My sense is if there were a disaster today, you would not see nearly as many mistakes with FEMA," he said.

FEMA initiated the debt-collection process in 2006, but a federal judge in New Orleans ordered the agency to suspend the effort in 2007 after a class-action lawsuit challenged FEMA's push to recover alleged overpayments. FEMA later paid more than $2.6 million to settle the claims and reinstituted the process last year.

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