The Federal Reserve has ordered a Georgia bank to pay $1.5 million in penalties for what it found was a “pattern or practice of violations” of the National Flood Insurance Act.
However, authorities did not specify what these violations were in an order issued on May 24 ordering SunTrust Banks to pay the civil fine to the National Flood Insurance Program.
The Federal Reserve specified, though, that the violations were in relation to a regulation prohibiting banks from making loans to properties in “special flood hazard” zones unless they are protected by flood insurance, according to a report by local media outlet Atlanta Journal-Constitution.
Flood law defines a “special flood zone” as those areas that are likely to experience flooding at least once every 100 years.
In the report, a SunTrust spokesperson said: “We have made enhancements to our flood insurance program since these issues occurred in 2012 to 2013.”
In the order, the Federal Reserve did not specify the number of violations committed by the financial institution, but said that each violation carries a fine of up to $2,000.
