The Federal Reserve System has fined Farmers Bank and Trust Company of Blytheville for practices that violate the National Flood Insurance Act.
On Tuesday, Nov. 10, the Federal Reserve issued an Order of Assessment, stating that the Blytheville-based bank had a “pattern or practice of violations of Regulation H, 12 C.F.R. § 208.25 of the National Flood Insurance Act. Regulation H oversees the implementation of the 1968 National Flood Insurance Act, which provides for loans for buildings and/or mobile homes located in areas determined to have “special flood hazards,” and for the Flood Disaster Protection Act of 1973.
This order did not specify the violations. However, under the Flood Disaster Protection Act, violations can be imposed against lenders for “making, increasing, extending or renewing loans in violation” of the act’s regulations, escrow requirements or notice requirements. In addition, penalties can be imposed for failure to provide notice under section 1364 of the National Flood Insurance Act of 1968.
According to the act, authorities can levy civil penalties of up to $2,000 per violation. Farmers Bank and Trust Company has agreed to pay $12,000, payable to the National Flood Insurance Program. The Federal Reserve System Board of Governors are charged with remitting the payment to the Federal Emergency Management Agency for deposit in the National Flood Mitigation Fund.
Farmers Bank and Trust Company has agreed to comply with the Order of Assessment and waived a hearing to take evidence in the matter or to challenge the matter, according to the Federal Reserve release. In addition, the bank did not admit or deny any of the allegations made by the Federal Reserve Board of Governors.
Arkansas Money & Politics reached out to the bank for comment. However, bank executives declined to comment.