First State Bank of Illinois

The FDIC has issued a Stipulated Order to First State Bank of Illinois, ordering it to pay a $32,500 civil money penalty under the Flood Disaster Protection Act (“FDPA”), 42 U.S.C. § 4012a(f), and Part 339 of the FDIC Rules and Regulations, 12 C.F.R. Part 339. Specifically, on loans secured by property located in flood hazard areas in which flood insurance has been made available under the National Flood Insurance Act of 1968, the bank violated:

• Section 339.3(a) of the FDIC Rules and Regulations, 12 C.F.R. §339.3(a), by: failing to obtain flood insurance at origination in six instances; allowing flood insurance to lapse during the term of the loan in eleven instances; and failing to obtain adequate flood insurance in seven instances;
• Section 339.7 of the FDIC Rules and Regulations, 12 C.F.R. §339.7 by failing to purchase flood insurance in the borrower’s behalf when the borrower failed to obtain the required insurance in two instances; and
• Section 339.9(a) of the FDIC Rules and Regulations, 12 C.F.R. §339.9, by failing to provide notice to borrowers that the collateral for the loan was in a designated special flood hazard area in nine instances.