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November 21, 2011

Thompson, Richmond: Action Needed on Recoupment Letters

(WASHINGTON) – Today, Rep. Bennie G. Thompson (D-MS), Ranking Member of the Committee on Homeland Security, and Rep. Cedric L. Richmond (D-LA), Member of the Committee on Homeland Security, sent a letter to W. Craig Fugate, Administrator of the Federal Emergency Management Agency (FEMA), regarding efforts to recoup disaster payments from individuals who erroneously received financial assistance after Hurricanes Katrina, Rita, and Wilma. The Democratic Congressmen believe that, years after these disasters, it is unjust for FEMA to attempt to recoup these funds from financially-distressed Americans who unwittingly received payments that FEMA has now determined were improper or excessive. Further, the process that FEMA is using appears to have due process problems.

Specifically, the Congressmen have recently learned that nearly 20% of the roughly 83,000 "Notice of Debt" recoupment letters that FEMA sent out have been returned "undeliverable". The debt, starting 30 days from the issuance of a letter, is subject to statutory interest and FEMA administrative fees; in the event that the debt is unpaid, it is subject to an additional 6% interest payment per year. When FEMA does not receive a response to a recoupment letter, it refers the debt to the Treasury Department for collection, regardless of whether the letter has been received or is "undeliverable." This one-size-fits-all approach does not protect the thousands of Americans who, because they are unaware that FEMA is pursuing recoupment, cannot pursue their appeal rights or negotiate payment plans.

On October 13, 2011, the full House Committee on Homeland Security unanimously adopted an amendment offered by Mr. Richmond to the Department of Homeland Security Authorization Act for Fiscal Year 2012 (HR 3116) that would require FEMA to certify to the Department of the Treasury that each recipient received notice of the debt and was given an opportunity to appeal before the debt can enter the collection process. The letter requests that FEMA exercise its administrative authority to implement this procedural reform to the recoupment process.

Congressman Thompson released the following statement with the letter:

"From the start, FEMA's recoupment process has had its share of problems. Struggling Americans who were first hit by Katrina or Rita's devastation deserve a fair shake and the opportunity to make their case. Last month the Committee spoke with one voice and approved legislation to, for the first time, require FEMA to certify receipt of a recoupment letter before referring the debt for collections. It is the right thing to do. I thank Mr. Richmond for bringing this issue to the Committee's attention and hope that we can prevail upon Administrator Fugate to make this right."

Congressman Richmond added the following statement:

"More than six years after Hurricanes Katrina, Rita and Wilma, I don't believe that FEMA should be trying to recoup disaster assistance from individuals who didn't do anything wrong. But if FEMA is going to continue this practice, at the very least it must provide basic due process protections" said Richmond. "I'm simply asking FEMA to certify that people know about this debt and have an opportunity to appeal before it forwards someone to the government's collections department."

Link to Letter

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Media Contact:
(Thompson) Adam Comis at (202) 225-9978
(Richmond) Virgil Miller at (202) 225-3727