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Financial Services Law Insights and Observations

FDIC enforcement actions include flood insurance, BSA violations

Federal Issues FDIC Enforcement Flood Disaster Protection Act Civil Money Penalties Mortgages Bank Secrecy Act

Federal Issues

On August 30, the FDIC announced its release of a list of administrative enforcement actions taken against banks and individuals in July. The list reflects that the FDIC issued fourteen orders and one notice of charges, which include “four stipulated consent orders; four terminations of consent orders; four Section 19 orders; one stipulated civil money penalty order; one stipulated removal and prohibition order; and one notice of charges and hearing.”

Among other actions, the FDIC assessed a civil money penalty (CMP) against a Louisiana-based bank for alleged violations of the Flood Disaster Protection Act, including, among other things, (i) failing to obtain flood insurance coverage on loans at the time of origination, increase, renewal, or extension; or (ii) failing to maintain flood insurance coverage for the term of a loan secured by property located or to be located in a special flood hazard area.

The FDIC also entered into consent orders with an Oklahoma-based bank and a West Virginia-based bank relating to alleged weaknesses in their Bank Secrecy Act compliance programs.

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