State Says 10 Banks Are Failing To Get Needed Money To Sandy Homeowners
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The state is pointing a finger at 10 banks that they say are failing to get money to homeowners in desperate need due to Hurricane Sandy.
The banks owe more than $40 million in Hurricane Sandy insurance claims to homeowners.
Insurance money was delayed in part due to the requirement that outgoing checks be co-endorsed by both the homeowners and the banks.
Benjamin Lawsky, the superintendent of the state Department of Financial Services, said they are continuing to push insurance companies to speed up the process.
"What we had initially after storm, the devastation was massive of course, and we had initially an insurance problem," Lawsky said. "We had to really speed up the insurance companies. But then, it became a banking problem. The money was not flowing. Once the insurance companies were cutting those checks, the money was not flowing out of the banks, and we went to them and tried to figure out what the problem was. I think they just weren't prepared for that massive number of insurance checks to flow in all at once, and then how to figure out how to administratively get it all out."
Lawsky said that the department put a stop to so-called forced placement insurance, whereby banks could force struggling homeowners to purchase overpriced, underpowered insurance policies.