Unity Bank pays $39,000 flood insurance penalty

The FDIC found the bank had engaged in a pattern or practice of committing violations of the FDPA, the notice requirements under section 1364 of the National Flood Insurance Act of 1968, 42 U.S.C. 4104a, and Part 339 of the FDIC’s Rules and Regulations, 12 C.F.R. Part 339 as follows:

• section 339.3(a) of the FDIC Rules and Regulations, 12 C.F.R. § 339.3(a), by failing to obtain flood insurance on a building securing a designated loan at the time of the origination of nine (9) loans;
• section 339.3(a) of the FDIC Rules and Regulations, 12 C.F.R. § 339.3(a), by failing to obtain adequate flood insurance at the time of the origination of sixteen (16) loans;
• section 339.5 of the FDIC Rules and Regulations, 12 C.F.R. § 339.5, by failing to require the escrow of all premiums and fees for required flood insurance when it required the escrow of taxes, insurance premiums, fees, or any other charges for a loan secured by residential improved real estate for two (2) loans;
• section 339.7 of the FDIC Rules and Regulations, 12 C.F.R. § 339.7, by failing to notify the borrower that the borrower should obtain flood insurance where a determination had been made that flood insurance had lapsed or a loan was not covered with the required amount of insurance in two (2) instances;
• section 339.9(a) of the FDIC Rules and Regulations, 12 C.F.R. § 339.9(a), by failing to provide to borrowers a Notice of Special Flood Hazard and Availability of Federal Disaster Relief Assistance when making, increasing, extending or renewing a loan on fifteen (15) occasions; and
• section 339.9(c) of the FDIC Rules and Regulations, 12 C.F.R. § 339.9(c), by failing to provide to borrowers a Notice of Special Flood Hazard and Availability of Federal Disaster Relief Assistance within a reasonable time before the completion of the transaction on seven (7) loans.