A fine of nearly $18 million is the result of findings of shortcomings in flood insurance protection for one of the nation’s largest banking organizations by the federal regulator of national banks, the agency said Tuesday.
Citibank, N.A., of Sioux Falls, S.D., was assessed the civil money penalty (CMP) of $17.9 million by the Office of the Comptroller of the Currency (OCC) for violating the 1973 Flood Disaster Protection Act (FDPA) and its implementing regulations, the agency said in a release.
According to the OCC, the bank “engaged in a pattern or practice of violation” of federal statutes and regulations. The agency said the bank failed to purchase regulatorily required flood insurance on behalf of borrowers with loans secured by buildings and mobile homes located in special flood hazard areas where flood insurance is available in a timely manner.
“The failure to purchase the required flood insurance in a timely manner resulted from Citibank’s 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,” the OCC stated.
According to the agency, the bank has paid the assessed penalty to the Federal Emergency Management Agency’s (FEMA) National Flood Insurance Program (NFIP).