In a recent class action lawsuit, Citibank agreed to pay $110 million to settle a massive flood insurance premium. Gordon Casey sued over a 400% increase in flood insurance premiums that skyrocketed from $325 per year to $1,478 in a decade. Casey sued on behalf of all homeowners. He says that the bank acted in bad faith when it offered kickbacks and commissions.
Citibank offered itself commissions
According to a new lawsuit, Citibank offered itself commissions in the form of forced flood insurance. The lawsuit claims that this is illegal and demonstrates a disregard for the needs of their clients. As a result, the bank forced homeowners to pay exorbitant flood insurance premiums that were more than what the law requires. However, some homeowners claim that their mortgage does not require them to pay such high premiums.
The settlement offers the homeowners $110 million in compensation to settle a putative class action lawsuit. The bank was accused of profiting from homeowners’ excessive insurance policies. The settlement provides refunds for homeowners who paid for the forced premiums. The settlement reflects the fact that Citibank is now a part of the settlement process. The company is also pledging to pay back customers’ forced premiums.
Citibank accepted kickbacks
The case centers on accusations that Citibank force-placed flood insurance on some of its borrowers, arranged kickbacks, and took commissions from insurance vendors. If you were forced to pay a high amount for flood insurance, you may have legal recourse. In the case of a Citibank flood insurance lawsuit, you could recover lost funds and get compensation for damages. You can also pursue other legal options.
In September, the Office of Comptroller of the Currency (OCC) fined Citigroup, N.A., of Sioux Falls, South Dakota, $17,998,510 in civil penalties for violating the Flood Disaster Protection Act and its regulations. The fine is part of an ongoing settlement, which has forced Citibank to reimburse borrowers who were force-placed with insurance policies that were not in their best interest.
MidFirst Bank acted in bad faith
The Oklahoma City-based MidFirst Bank has agreed to settle a class-action lawsuit alleging it forced borrowers to purchase flood insurance. The settlement covers approximately 15,000 borrowers. It settles allegations that banks acted in bad faith by forcing borrowers to purchase flood insurance when they didn’t need it. The lawsuit alleges that MidFirst’s forced placement of flood insurance premiums resulted in profits for the bank and borrowers.
In a recent ruling, a federal judge in New York found that MidFirst Bank and Citibank acted in bad faith when they pressured homeowners to purchase a flood insurance policy that they knew was insufficient. The bank initially required the homeowner to purchase flood insurance for at least 14 times the amount of the outstanding principal balance. However, once the homeowner was in the flood zone, the mortgage company discovered that the insurance coverage was insufficient and passed the cost of a new policy onto Casey’s monthly payments.
JPMorgan Chase acted in bad faith
In response to a Citibank Flood Insurance Lawsuit filed by homeowners in North Dakota, the Office of Comptroller of the Currency has fined the bank $17,998,510 for failing to comply with federal and state regulations regarding flood insurance. Citibank, based in Sioux Falls, South Dakota, was found to have violated the Flood Disaster Protection Act of 1973 and failed to provide its customers with adequate flood insurance. The OCC alleged that Citibank failed to purchase flood insurance promptly and that the bank had a deficient FDPA policy that allowed the third-party service provider to extend the 45-day notification period. As a result, Citibank paid a $17,998,510 civil money penalty to the Federal Emergency Management Agency’s National Flood Insurance Program.
The SEC’s complaint also claims that J.P. Morgan Chase acted in bad faith by helping its clients design several transactions disguised as commodity trades. These transactions were essentially a disguised loan to Enron. In reality, the transactions were structured in such a way that the risk of the commodity price would be passed back to Enron, while the bank would receive a lump sum of the proceeds.
Assurant acted in bad faith
A recent settlement between the federal banking regulator and Citibank has settled two class action lawsuits over the bank’s use of force-placed insurance practices. The lawsuit claims that Citibank violated the law by forcing customers to buy flood insurance, and also acted in bad faith by receiving kickbacks in exchange for force-placed policies. This settlement will allow people who were forced to purchase flood insurance to recover the money they spent on them, as well as get compensation for damages.
The settlement focuses on force-placed insurance policies, which result in inflated insurance premiums, kickbacks, and captive reinsurance arrangements. Citibank, HSBC, and Assurant have all denied that they acted in bad faith and that the settlement amounts are excessive. The insurers’ practices benefited from the forced-placed insurance practices. HSBC, Assurant, and a large number of other financial institutions have settled similar insurance class action lawsuits because they were so negligent in their practices.