Self-identified flood issues… in the clear for the next exam?

Answered by:

Question:

We had a rather big flood compliance issue, but we self-identified it and are correcting the problem. Is that enough to keep us out of hot water at our next exam?

Answer:

Maybe not. In August 2023, Regions Bank was handed the largest flood civil money penalty in history: $2,945,500. This whopper of a fine was split between a $58,000 penalty for flood violations, and $2,887,500 for ineffectively monitoring their HELOC and Home Equity Portfolio for over a year. They had self-identified the issues and enhanced their flood compliance program by 2017. Nonetheless, their problems must have been egregious enough to constitute an “unsafe or unsound banking practice”, triggering penalties under the Federal Deposit Insurance Act. This is the first time the industry has seen the application of such a fine for systemic violations in flood compliance, and could usher in a new practice by regulatory agencies.

Shocked? Learn more at the upcoming webinar “Flood Compliance is Me$$y” on October 25, 2023!
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Learn more about Rebekah Leonard's, Flood Compliance is Me$$y
webinar.