SunTrust Banks was ordered to pay a $1.5 million civil fine for “the bank’s pattern or practice of violations” of the National Flood Insurance Act, according to the Federal Reserve.
In an order signed late last month, the Federal Reserve cited violations of a regulation prohibiting banks from making real estate loans on properties in "special flood hazard" zones unless they're covered by flood insurance.
According to the regulation, a "special" flood zone is likely to be flooded at least once every 100 years.
Each violation of the rule carries a fine of up to $2,000, according to the Federal Reserve’s order, indicating that the action against Atlanta-based SunTrust may have involved at least several hundred alleged infractions of the rule.
The Federal Reserve declined to provide additional details.
“We have made various enhancements to our flood insurance program since these issues occurred in 2012-2013,” a SunTrust spokesman said in a emailed request for comment.
Under the settlement, SunTrust agreed to pay the $1.5 million into the National Flood Insurance Program.
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