[StBernard] Gulf Coast in line for $1 billion in donations

[Westley Annis]

Corporations to give banks cash for loans 
Monday, November 20, 2006 
By Kate Stevens
Major American corporations will announce today a $1 billion commitment to
help rebuild parts of the Gulf Coast destroyed by last year's deadly
hurricanes. 
As part of the Gulf Coast Rebuilding Challenge, corporate giants will
channel long-term, private-sector financing into the region that community
banks will use to make loans to homeowners trying to rebuild. The project
has the support of the Office of the Federal Coordinator of Gulf Coast
Rebuilding. 
Microsoft Corp., The Home Depot, Bank of America, General Motors Corp.,
Fannie Mae and The First American Corporation hope to channel at least $1
billion into the region in the next five years, said Phil Battey, vice
president of public affairs for Promontory Interfinancial Network. 


In the years to come, there will be "a tremendous need for capital into the
community to help rebuild the number of homes," destroyed in the Gulf Coast,
said Alden McDonald, president and chief executive officer of Liberty Bank &
Trust, a Louisiana bank involved in the project. 
Although Battey would not say how much each corporation is planning to
donate, he said the Gulf Coast Rebuilding Challenge already has commitments
of $50 million and will work to raise $1 billion. 
Participating banks must have less than $500 million in assets and be
located in areas affected by the storms as designated by the Gulf
Opportunity Zone Act. These local banks, including Liberty, also must be
members of the Promontory network. 
With 37 banks in the Gulf Coast area already members of the network,
Promontory hopes to entice the 300 or so other banks to join by waiving the
implementation fee. Foregone revenue could total up to $1.5 million, Battey
said. 
The corporations have the choice of selecting which network bank in which to
deposit their donation, Battey said. If the donation is more than $100,000,
the limit of FDIC coverage, the money will be divided into certificates of
deposits and sent to different banks in the network. These banks will then
send the equivalent in money back to the primary bank to use for loans, he
said. 
Each bank's administration will decide how to loan the money for rebuilding
projects, Battey said. 
The initiative will be announced today at an 11 a.m. press conference at a
Gentilly home destroyed during Hurricane Katrina, Battey said. A firefighter
and his family are restoring the home using money financed by a local bank,
he said. 
With such a powerful core group of investors, "we thought we had critical
mass," to go public with the announcement, Battey said. 
Project participants hope to garner attention not just locally but
nationwide. 
"This is one way to begin getting people on a national scope really involved
in the continuing rebuilding of New Orleans and the Gulf region," McDonald
said. 
. . . . . . . 
Kate Stevens can be reached at kstevens at timespicayune.com or (504) 826-3495.