InfoBytes Blog
FDIC releases July enforcement actions
On August 26, the FDIC released a list of administrative enforcement actions taken against banks and individuals in July. During the month, the FDIC issued seven orders consisting of “two orders of prohibition, two orders to pay civil money penalty, two section 19 orders, and one order terminating consent order.” Among the actions is an order to pay a civil money penalty imposed against an Iowa-based bank related to alleged violations of the Flood Disaster Protection Act (FDPA) and the National Flood Insurance Act of 1968. Among other things, 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 loans 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 as to whether flood insurance was available for the collateral”; and (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.” The order requires the payment of a $2,500 civil money penalty. The actions also include a civil money penalty imposed against a Texas-based bank related to six alleged violations of the FDPA for “failure to obtain flood insurance or obtain an adequate amount of insurance coverage, at or before loan origination, for all structures in a flood zone, including multiple structures,” among other alleged violations. The order requires the payment of a $6,000 civil money penalty.