We have a loan officer that has never received a license to seel insurance and they sell credit life. What are the major implications, we have the FDIC coming.

Since requirements for selling insurance is a State law/regulatory issue, I doubt that the FDIC will even notice. I would be more worried about the State banking or insurance regulators, especially if they receive a complaint. As for penalties, you would have to look at State law/regulation. If the bank knows this, why is it allowed to happen?

New to compliance, just found out.

rlcarey: I beg to differ.

Feb. 2012 FDIC compliance exam cited Section 343.60 of FDIC reguations "prohibits a bank from permitting any person to sell or offer for sale any insurance product or annuity in any part of its office or on its behalf, unless the person is at all times appropriately qualified and licensed under applicable State insurance licensing standards with regard to the specific product being sold or recommended".

We had recently hired a new consumer loan officer, who had been working in secondary market and had not yet completed licensing criteria, but had offered and sold credit life on one consumer loan. Isolated instance. Loan officer applied for and received licensure shortly thereafter.

Well, I did say: "I doubt that the FDIC will even notice". I did not say they would not or don't care.