St. Louis Post-Dispatch
New Frontier Bank has paid a $70,000 penalty after being accused of violating the Real Estate Settlement Procedures Act (RESPA). The law forbids lenders from giving kickbacks to property agents who steer settlement service business on government-insured mortgages to them.
The sanction was handed down in May by the Federal Deposit Insurance Corp. (FDIC), which only recently disclosed the fine. As part of its consent order, New Frontier must submit written progress reports each quarter on its compliance with the order's provisions -- including notifying consumers affected by the RESPA violations. While New Frontier did not admit to wrongdoing, bank representatives said it would be cost-prohibitive to fight the FDIC on the charges.