A $21 billion Chicago bank faces a quarter-million dollar fine for violations of rules implementing flood insurance requirements, the Federal Reserve said Thursday.
First Midwest Bank of Chicago, according to the Fed, was assessed a $253,500 civil money penalty (CMP) for its “pattern or practice of violations of the agency’s Regulation H,” which implements the National Flood Insurance Act.
While no specific violations of flood insurance requirements were listed in the order, typical violations cited by regulators include making, increasing, extending, or renewing loans secured by properties in special flood hazard areas only without obtaining proof of adequate insurance; failure to collect timely pay flood insurance premiums in escrow; failure to provide timely and adequate notices to customers for loans secured by properties in special flood hazard areas, including if a change in servicer occurs; and failure to provide borrowers with notice of inadequate flood act insurance and force place adequate insurance if not obtained by the borrower in 45 days.
Federal Reserve issues enforcement action with First Midwest Bank