June 30--The Federal Deposit Insurance Corp. fined New Frontier Bank in St. Charles $70,000 for violating a federal consumer disclosure and anti-kickback act.
The FDIC disclosed the fine Friday, but the bank was ordered to pay the fine in May.
According to a consent order, the FDIC determined that New Frontier Bank engaged in violations of section 8 of the Real Estate Settlement Procedures Act and its implementing regulation, known as RESPA. RESPA prohibits lenders from paying real estate agents fees for the referral of settlement service business tied to federally related mortgage loans.
Kris Weidenbenner, president and senior lender at New Frontier Bank, which has two branches in St. Charles and was founded in 1999, said the bank has already paid the fine to the U.S. Department of the Treasury. "We did not agree with it, however after consulting with our attorneys, it would cost us more to fight it."
The FDIC's consent order requires the bank to provide written progress reports quarterly detailing actions taken to secure compliance with the order's provisions, which includes notifying consumers affected by RESPA violations.
Lisa Brown is a business reporter at the Post-Dispatch. Follow her on Twitter @LisaBrownSTL and the Business section @postdispatchbiz.
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