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FDIC releases March enforcement actions, fines banks for flood insurance violations
On April 27, the FDIC released a list of 20 administrative enforcement actions taken against banks and individuals in March. Civil money penalties were assessed against several banks including one against a Michigan-based bank citing violations of the Flood Disaster Protection Act (FDPA) for allegedly: (i) failing twice “to obtain flood insurance on a building securing a designated loan at the time of origination”; (ii) failing to obtain flood insurance on a borrower’s behalf in multiple instances, in addition to twice failing to maintain adequate flood insurance; and (ii) failing to follow force placed flood insurance procedures for several loans. A second civil money penalty was assessed against a New Jersey-based bank for allegedly engaging in a pattern of violating requirements under the FDPA and the National Flood Insurance Act, which included (i) failing to notify borrowers that they were required to purchase flood insurance; and (ii) failing to obtain flood insurance on a borrower’s behalf in a timely fashion for those borrowers who failed to obtain insurance within 45 days after receiving notification.
Also on the list are seven Section 19 orders, which allow applicants to participate in the affairs of an insured depository institution after having demonstrated “satisfactory evidence of rehabilitation,” and six terminations of consent orders, among others.
There are no administrative hearings scheduled for May 2018. The FDIC database containing all 20 enforcement decisions and orders may be accessed here.