Citibank pays $18M in Flood Act penalties
The OCC has issued a Consent Order to Citibank, N.A., Soiux Falls, South Dakota, under section 102(f) of the Flood Disaster Protection Act ("Flood Act") for a pattern or practice of violations of the Flood Act and its implementing regulations, 12 CFR 22.7(a).
The OCC found that:—
- as part of its Flood Act compliance program, the Bank utilized a third-party to service Designated Loans within its residential lending units to notify the borrowers and force place flood insurance when the flood insurance failed to appropriately cover the Collateral.
- the Bank’s policies and procedures allowed its third-party servicer to extend the 45-day period after notification to the borrower resulting in the untimely force placement of flood insurance on Designated Loans.
- since at least 2014, the Bank failed to force place insurance in a timely manner on residential Designated Loans and engaged in a pattern or practice of violations of the Flood Act and its implementing regulations, including 12 C.F.R. § 22.7(a) (Force placement of flood insurance).