Consumer Finance Insights
May 19, 2016

Federal Reserve Announces Enforcement Action Against State Bank for Alleged Violation of the National Flood Insurance Act

On May 17, the Federal Reserve announced the execution of a settlement agreement with a state bank resolving alleged violations of the National Flood Insurance Act (“NFIA”), 42 U.S.C. § 4012a(f), and Regulation H, 12 C.F.R. part 208.  The Board of Governors asserted that where a pattern or practice of violations of the NFIA is found, civil money penalties can be imposed up to $2,000 per violation.  To resolve the enforcement actions, the bank consented to a civil money penalty of $27,285.  The bank did not admit any wrongdoing and the agreement was entered without any finding on any issue of fact or law.