Flood Insurance ProgramInundated

WASHINGTON - (01/26/06) – A top official with the FederalEmergency Management Agency asked Congress Wednesday to lift thefunding again for its National Flood Insurance Program by another$5.6 billion, as all existing money has been washed away by claimsfrom Hurricane Katrina. NFIP director David Maurstad told the HouseBanking Committee that the total cost for the 2005 hurricane seasonwould exceed $23 billion, almost $22 of that for Hurricane Katrina.Congress lifted the budget for the insurance program from $1.5billion to $3.5 bill right after the massive hurricane hit, then to$8 billion, and finally to $18.5 billion before adjourning for theyear last month. Meantime, Congress is still seeking to resolve amuch bigger problem–that is at least as much flood damagefrom Katrina that is not insured. Unless Congress steps into thefray, banks, credit unions and other lenders could get stuck withthat bill.