Mellody Hobson: Financial Relief for Evacuees
Sept. 7, 2005 -- Hurricane Katrina may have cost 1 million Americans their jobs this month. Now the thousands of evacuees displaced by the hurricane need jobs, homes and money to pay bills. "Good Morning America" financial contributor Mellody Hobson discussed options available to evacuees and how ordinary Americans can help.
Employers Lend a Hand
Some Americans devastated by Hurricane Katrina will seek federal subsidies, such as welfare, to get by, but others will turn to their employers.
Several companies have come up with innovative ways to help their employees in this time of crisis. Whole Foods, Starbucks and Wal-Mart are offering employees displaced by the hurricane jobs at any of their other locations.
Starbucks is also matching displaced employees with "foster families" to help ease their transition to a new area. The company is also depositing $500 into the account of its affected employees or giving a debit card to those employees without direct deposit. Wal-Mart is also offering displaced employees $250 in cash, and another $750 when they fill out a form.
The Gulf Coast was a big gaming area, and 6,000 Harrah's employees lost their jobs from Katrina. Harrah's is helping out by paying their employees for the next three months. The company has also set up relief centers in the region.
Banks and Credit Card Companies
For evacuees who left behind their checkbooks, ATM cards and other ways to access their bank accounts, the Federal Deposit Insurance Corporation is trying to help out. It has a toll-free, 24-hour hotline to help people get access to their funds: 1-877-ASKFDIC.
The FDIC also said displaced people can open accounts at the local bank branch where they are temporarily living without the usual documentation and paperwork. All the large national banks can then transfer the funds to that location to be withdrawn.
As for credit card companies, Discover, American Express and Citibank are offering payment relief plus emergency replacement cards and emergency PINs. Citibank is also waiving interest and finance fees for three months; American Express is giving a one-month grace period and allowing people to exceed their credit limit by $1,000.
FEMA
The Federal Emergency Management Agency is sending debit cards to displaced people to help them buy the essentials. These cards are being handed out in person with workers going from shelter to shelter to make sure evacuees get their cards quickly. Officials say the paperwork usually required to get the debit cards will be greatly reduced or eliminated altogether.
Mortgage and Rent
Foreclosure on property can hurt credit records for years, but several companies are stepping up to help Hurricane Katrina victims.
Freddie Mac is a major lender in this country that traditionally lends to lower-income people who are most vulnerable to foreclosure. Freddie Mac has agreed to reduce or suspend mortgage payments for individuals in the disaster zone for up to 12 months.
Bank of America, the nation's third-largest bank, is waiving late charges on mortgages and home equity for 90 days. The bank has also pledged not to issue any negative credit reports for 90 days.
Insurance
There are insurance plans that will cover some of the costs evacuees incur in terms of food, hotel bills or even renting another home. When people are able to talk to their insurance agent, they should check their homeowner's policy for a specific type of insurance called "additional living expense."
This coverage may allow you to be reimbursed for "essentials of daily living." The general rule of thumb of the insurance company is to reimburse policy holders for the difference between expenses before the disaster and after being displaced. It's crucial to keep receipts in order to be reimbursed.
Ways to Help
There are simple ways ordinary Americans can aid evacuees.
Verizon Wireless customers can donate up to $25 to the Red Cross directly from their cell phones by sending a text message to "help." The amount will show up on the monthly bill.
Also, for those Americans who work for a company that has employees who were displaced by Katrina, contact your human resources department. Corporations respond to grassroots movements.