Skip to content

Bank of Louisiana flood penalty imposed

New Orleans, LA
Fine Amount: 
Issued by: 

The Board of Directors of the FDIC has issued a Decision and Order of Assessment of a $136,100 civil money penalty in the matter of the Bank of Louisiana, New Orleans, Louisiana.

The Board issued the Decision and Order following issuance of a Recommended Decision by an administrative law judge (ALJ) on December 11, 2018, that the bank be assessed a $136,100 penalty under the Flood Disaster Protection Act (FDPA). The action was initiated on May 19. 2017, when the FDIC issued a Notice of Assessment of CMP, Order to Pay and Notice of Hearing alleging that the bank engaged in a pattern or practice of violating the National Flood Insurance Act (NFIA), the FDPA, and part 339 of the FDIC Rules and Regulations. The bank's answer to that Notice denied the majority of the FDIC's material allegations, and asserted that the enforcement action was an improper attempt to remove G. Harrison Scott as the bank's Chairman.

[Note: See also a November 15, 2016, enforcement action against the bank in which the bank's board of directors was ordered to wrest control of the bank from Scott, who was alleged to have ignored board direction.]

In November 2013, the FDIC examined the bank and cited several violations of Part 339 in its Compliance Report of Examination, and the bank confirmed each of the flood insurance violations cited in its response to the report. The FDIC's report of its 2015 examination concluded that multiple flood insurance violations had occurred and that many were repeat violations.

The ALJ concluded that:

  • in 26 instances, the bank made, increased, extended or renewed loans without flood insurance coverage being in place at or before loan origination.
  • in at least 14 instances, the bank failed to maintain the required amount of flood coverage for the term of the loan
  • in 11 of those 14 instances, the bank failed to force place coverage within 45 days after notifying borrower's of the insufficient coverage
  • in 20 cases, the bank filed to ensure that collateral had sufficient flood coverage
  • in 36 instances, the bank failed to send notices to borrowers of insufficient or lapsed coverage
  • in 40 cases, the bank made, increased, extended or renewed loans without providing the SFHA notice to the borrower
  • in 60 instances, the bank failed to provide the required SFHA notice within a reasonable time before completion of the transaction.

Penalties View All

Banker Store View All

From training, policies, forms, and publications, to office products and occasional gifts, it’s available here:

Banker Store

hot right now

image description

Looking for effective, convenient training on a particular subject?

BOL Learning Connect offers more than 200 courses ON-DEMAND or on CD ROM from AML to Reg Z and every topic in between.

Search Penalties