Spencer Savings Fined By FDIC
Spencer Savings Bank has paid two Federal Deposit Insurance Corp. penalties totaling $10,305 for violations of the federal Home Mortgage Disclosure Act and the Flood Disaster Protection Act.
According to the FDIC, the bank paid the penalties under a consent agreement that does not require the bank to admit or deny any wrongdoing.
The FDIC alleged that Spencer Savings made mortgage loans on properties without requiring the properties to be covered by sufficient flood insurance, without providing timely, written notice to the borrowers of whether flood insurance was available and without maintaining a record of whether the borrowers received such notices from the bank at all.
The penalties were meted out in two parts of $5,500 and $4,805.
K. Michael Robbins, Spencer Savings' president and CEO, said the bank wrote loans last year for six mobile homes in Middleborough and made mistakes on paperwork related to the type of flood zone the mobile homes are in.
"The flood zone maps are changing all the time and we might have had it in ‘flood zone A' and it was supposed to be in ‘flood zone B,'" he said. "And we made the same mistake six times."
Bruce Spitzer, a Massachusetts Bankers Association spokesman, said the type of mistakes and subsequent fines made and received by Spencer Savings aren't uncommon.
"It happens occasionally, and it's not a big issue," he said. "It does occur, but it's rare that it's repeated or becomes habitual."
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