Yet another bank has been hit with civil money penalties for alleged violations of the National Flood Insurance Act. Farmers and Merchants Bank of Long Beach must pay $9,240, according to this order. The number of flood insurance civil money penalties (CMPs) recently issued against banks is almost overwhelming. Take a look at this website, which lists all the CMPs issued in the past few years. (Website is organized by Bankers Online, which is a nice compliance resource.)
The Compliance Guy is unaware of any federal credit unions that have been hit with CMPs due to flood insurance compliance concerns. That being said, when I see so many banks being hit with CMPs, it raises a red flag. If your credit union does mortgage lending, it may be a good time to check the health of your flood insurance program.
With that in mind, here's a link to NCUA Letter to Credit Unions 04-CU-16, which addresses compliance with federal flood insurance requirements.
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