Congress Debates Hurricane Bailout OfLenders

WASHINGTON - (10/21/05) -- Gulf State lawmakers called onCongress Thursday for a massive bailout of lenders and propertyowners now recovering from the unprecedented flooding followingHurricane Katrina. Mississippi Congressman Gene Taylor urgedmembers of the House Financial Services Committee to join his bidto allow hundreds of thousands of uninsured property owners in NewOrleans, Mississippi and Alabama to buy flood insuranceretroactively through the National Flood Insurance Program.Otherwise, warned the Democratic lawmaker, hundreds of small creditunions and banks will be left holding the bag for the huge floodlosses, forcing many of them out of business. Rep. Barney Frank,whose own state was hit by massive flooding over the past twoweeks, also called for some kind of bailout of uninsured propertyowners. "By helping them, we also avert serious damage to ourfinancial system," said the Massachusetts Democrat. "We don't wantto see smaller banks and credit unions forced out of business."Taylor, whose home state was one of the worst hit by HurricaneKatrina, has been pushing over the past month for his bill thatwould allow the hundreds of thousands of uninsured home- andproperty-owners to buy flood insurance through the NFIPretroactively, in exchange for 10 years of premiums and a 5%penalty, all of which could be paid by any claims theyearn.