A few weeks ago, the OCC popped Northern Trust of Miami with a $125,000 civil money penalty for alleged violations of flood insurance requirements. Ouch. That's a CMP that gets your attention.
What did they do? The Consent Order doesn't get into too many details, but here's the reason:
(B)ased on the Bank’s pattern or practice of making, increasing, extending or renewing loans secured by property located in a special flood hazard area for which flood insurance is available under the National Flood Insurance Act, without requiring the property securing the loans to be covered by the requisite flood insurance. The Bank’s conduct occurred during the period December 2003 through April 2008, in violation of the Flood Disaster Protection Act...
So, this had been going on for some time. You can read the entire Consent Order here. What can you take away from this? Flood insurance compliance is something to take seriously.