A recent news update shared by the Office of the Comptroller of the Currency (OCC) reported that Citibank, N.A, of Sioux Falls, South Dakota was fined a $17,998,510 civil money penalty after engaging in an ongoing practice of violating regulations cited by the Flood Disaster Protection Act (FDPA).
In this case, the bank failed to purchase flood insurance on behalf of borrowers with loans secured on buildings, homes and mobile homes within the Special Flood Hazard Area (SFHA) within a timely manner.
As the article explains, the reason for this failure is attributed to “deficient FDPA policies and procedures, which allowed the bank’s third-party service provider to extend the 45-day notification period after the initial borrower notification.”
At WTG, we are consistently educating our clients on best practices for flood regulation and compliance because we are familiar with the many areas of confusion in our industry, and regularly overturning faulty flood determinations.
Flood regulation is a pressing issue right now, as superstorms have vastly impacted the NFIP, and new maps are being released by FEMA. Congress has recently approved over $100M for new mapping, demonstrating that flood regulation will be seeing ongoing change and continue to be of utmost importance.