FDIC Penalizes Louisiana Bank For Alleged Violation of the National Flood Insurance Act

FDIC  •  Flood Insurance

​On August 28, 2015, the Federal Deposit Insurance Corporation (FDIC) announced the release of its July 2015 administrative enforcement actions against banks and individuals.  Among these was an Order to Pay Civil Money Penalties​ assessed against ​a Louisiana bank for $123,000 for alleged violations of the Flood Disaster Protection Act of 1973 (FDPA), the National Flood Insurance Act of 1968 (NFIA), and Part 339 of the FDIC Rules and Regulations.​  The FDIC determined that the bank allegedly failed to:

  • “[O]btain flood insurance coverage at or before the time of origination on 33 loans secured by a building or mobile home. . . .”
  • “[M]aintain flood insurance for the term of the loan on 19 designated loans. . . .”
  • “[M]aintain a sufficient amount of flood insurance coverage on 99 designated loans. . . .”
  • “[P]rovide a notice of force placement of flood insurance to the borrower on 85 designated loans​. . . .”
  • “[F]orce place flood insurance on 25 designated loans. . . .”
  • “[P]rovide a notice of special flood hazards to the borrower on 35 designated loans. . . .”
  • “[P]rovide a timely notice of special flood hazards to the borrower on 98 designated loans; and
  • “[M]aintain a record of the receipt of the notice of special flood hazards by the borrower on 12 designated loans. . . .”
The bank consented and agreed to the civil penalty “without admitting or denying any violations of law or regulation​. . . .”
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