TN bank earns fine for multiple shortcomings in obtaining flood insurance

A fine of $172,500 was assessed against a Tennessee bank last month for failing to obtain or extend flood insurance coverage – up to 196 times – for loans it made, the federal insurer of bank deposits said Friday.

In publicly disclosed enforcement actions taken in March, the Federal Deposit Insurance Corp. (FDIC) said that Firstbank of Nashville, Tenn., was assessed the civil money penalty for failing to obtain the flood insurance coverage “at or before loan origination, increase, renewal, or extension” for 61 loans.

In addition, the FDIC said, the bank failed to maintain an adequate amount of flood insurance for the term of the loan in 88 instances, failed to provide the required force-place flood insurance notice to borrowers within 45 days of force placement in 10 instances, and failed to provide a “Notice of Special Flood Hazards and Availability of Federal Disaster Relief Assistance timely” 37 times.

The bank signed a consent agreement with the FDIC.

In addition to that action, the FDIC said in March it assessed two additional CMPs: $40,500 against Oriental Bank of San Juan, P.R., also for flood insurance infractions; and $15,000 against a former employee of Anderson Brothers Bank of Mullins, S.C., for multiple unauthorized extensions of credit in the form of loan balance increases.

FDIC Makes Public March Enforcement Actions

 

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