Chillicothe State Bank pays flood insurance penalty
The FDIC has issued the Chillicothe State Bank, Chillicothe, Missouri, a consent order to pay a $4,000 civil money penalty for a pattern or practice of violations of the Flood Disaster Protection Act and Part 339 of FDIC Rules and Regulations, after finding that the bank:
- Made, increased, extended or renewed loans secured by a building or mobile home located or to be located in a special flood hazard area without requiring that the collateral be covered by flood insurance;
- Made, increased, extended or renewed a loan secured by a building or mobile home located or to be located in a special flood hazard area without providing timely notice to the borrower and/or the servicer as to whether flood insurance was available for the collateral; and
- Failed to comply with proper procedures for force-placing flood insurance in instances where the collateral was not covered by flood insurance at some time during the term of the loan.