InfoBytes Blog
FDIC releases February enforcement actions
On March 25, the FDIC released a list of administrative enforcement actions taken against banks and individuals in February. During the month, the FDIC made public six orders consisting of “three Orders to Pay Civil Money Penalty, two orders terminating consent order, and one consent order.” Among those announced were two civil money penalties for alleged violations of the Flood Disaster Protection Act. In one civil money penalty, imposed against a Kansas-based bank, the FDIC claimed that the bank “made, increased, extended, renewed, sold, or transferred a loan secured by a building or mobile home located or to be located in a special flood hazard area without properly notifying the Administrator of FEMA or their designee.” The order requires the payment of a $2,250 civil money penalty. In another civil money penalty, imposed against a Minnesota-based bank, the FDIC claimed that the bank: (i) “made, increased, extended, or renewed loans secured by a building or mobile home located or to be located in a special flood hazard area without requiring that the collateral be covered by flood insurance”; (ii) “made, increased, extended or renewed a loan secured by a building or mobile home located or to be located in a special flood hazard area without providing timely notice to the borrower and/or the servicer as to whether flood insurance was available for the collateral”; and/or (iii) “failed to comply with proper procedures for force-placing flood insurance in instances where the collateral was not covered by flood insurance at some time during the term of the loan.” That order requires the payment of a $3,000 civil money penalty.