FDIC Issues Updated Enforcement Actions Manual for Flood Insurance Civil Money Penalties

The FDIC recently updated its manual for flood insurance civil money penalties (CMPs) for violations of the National Flood Insurance Act and Flood Disaster Protection Act (the Flood Act) and Part 339 of the FDIC regulations. 

The updated CMP framework, which is consistent with the Flood Act, requires a penalty of up to $2,000 per violation per loan on an insured depository institution (IDI) for certain violations of the Flood Act.  The penalty will be adjusted for inflation on an annual basis.  Flood Act CMPs will be adjusted for smaller institutions.  First the FDIC will calculate the base CMP, which will take the nature of the violations into account, and then the FDIC will adjust the CMP depending on the size of the institution and its ability to pay CMPs.