Powell, a wealthy contributor to President Bush's presidential campaign, will be in charge of the long-term plans to rebuild the states hit by hurricanes Katrina and Rita in the late summer. The sluggish federal response to Hurricane Katrina, the first and most damaging of the two, particularly has been widely criticized.
Powell will be the administration's point person for dealing with Congress, state and local governments, and private businesses on the hurricane relief efforts. He eventually will replace Coast Guard Vice Admiral Thad Allen, who has been the day-to-day top federal coordinator for Katrina recovery.
"Don has the leadership, ideas and optimism that the residents of the Gulf Coast Region deserve," Homeland Security Secretary Michael Chertoff said in a statement announcing Powell's role.
Known for his affable, informal attitude, Powell is described as having more than 30 years experience in the financial services industry. Qualifications for federal response officials have been fiercely scrutinized since Katrina, and former Federal Emergency Management Director Michael Brown resigned amid questions about his experience to handle disasters.
Before becoming FDIC chairman in August 2001, Powell was president and chief executive officer of First National Bank in Amarillo, Texas, and chairman of the board of regents for the Texas A&M University System an earlier Bush appointment.
One of the "Pioneers" who raised at least $100,000 for Mr. Bush's presidential campaign, Powell has great personal wealth. He was praised by the banking industry when Mr. Bush appointed him to chair the FDIC.
Congress has so far provided $62 billion for Gulf Coast hurricane recovery efforts, of which about $40 billion has yet to be spent.
Katrina, which hit Aug. 29, flooded New Orleans and devastated much of the Louisiana, Mississippi and Alabama coasts. Hurricane Rita arrived two weeks later, damaging parts of coastal Texas and Louisiana.
Hurricane Wilma last week caused widespread wind damage across south Florida.