Have home in hazardous flood area. Had flood. Bank required flood insurance on home only, not on barns or grain bins. Insurance proceeds paid on loan leaving balance of $70,000. Land worth $20,000 with $50,000 deficiency. Bank said they did everything correctly, but they would extend the loan to make repayment easier. I lost cattle and farm equipment. Bank had these loans cross collateralized with home loan. Fine print on loan said I would not sue bank (did not notice when signing papers) They did not require insurance at loan extension. There was no new money, just extended time. Turned in complaint to FDIC they deemed bank negligent of mandatory purchase of flood insurance. Told bank to get in compliance. Six months later, bank has done nothing except hire a lawyer who told me to kiss off and quit harassing the bank. FDIC issued no civil money penalties, said bank did not exhibit a pattern of non-compliance. What are my options? Will the FDIC eventually force the bank to get in compliance or will I just have to continue paying for this and chalk it up to experience. Where they supposed to require me to have flood insurance on the farm equipment loans since they were cross collateralized?

You had a loan and had a loss. You're saying it is the bank's fault that you weren't insured?

Each building should have been insured, assuming they could be, up to the lower of your loan balance or the insurance limit. That said, why didn't YOU have the insurance in place?

If you believe that notifying the regulator would cause the bank to forgive your debt, that isn't likely.

You have a debt and you need to pay it.

If the structures that are there now are insurable, you are required to have that coverage. This is a cost you must pay.

Yes, it's the bank's fault, they are supposed to require me to have have insurance before making or extending a loan on structures located in a hazardous flood area. This is a federal law. There were several buildings that were fully insurable. Valued at over $500,000 RCV before flood. Had previous flood zone determination that indicated property was not in hazardous flood zone. We had preferred risk policy to protect our investment well over loan amount. Bank obtained new flood zone determination, found out first determination was in error, accepted our flood insurance policy in the wrong zone. Two years later, change in bank personnel, told us they could no longer accept our preferred risk policy, that we would have to change to a standard rated policy. Notified insurance company, their flood zone determination indicated we were ok. Bank said they would straighten this out, they never did. When our policy came for renewal, bank employee told us if we didn't change our preferred risk policy, we would be committing insurance fraud. They had to have a policy in the correct zone and they would force place insurance and do what was necessary to straighten out their mistake in accepting our policy in the wrong zone two years earlier. Three months later, waiting on them to correct mistake, had flood. Heavily damaged all buildings. Found out bank put $55,000 force placed flood insurance, 20% of the loan amount. Said they used land only appraisal that had land valued at $6,000 an acre and had sufficient insurance. Found out appraisal was fraudulent and not a land only appraisal. And yes, we realize we are responsible for the debt and have been paying it.

The bank cannot turn back the hands of time and insure your buildings prior to the flood. That is not the compliance the bank regulator was requiring.

The FDIC's concern is that the bank have policy and procedures in place to comply with the flood regulations. They also determined this was a one-off event and not a pattern of noncompliance. So the FDIC is done "helping" you. They do not get involved in litigation matters and have enforcement powers to see that banks comply with regulations, that's it.

Now if you think you have a claim for loss due to the bank's negligence, then you should engage an attorney and sue in civil court.