The Federal Reserve Board has hit three Southern banks with enforcement actions.

Highlands Community Bank in Covington, Va., and New Peoples Bank in Honaker, Va., were each ordered to pay civil money penalties for violating the National Flood Insurance Act. Banks are responsible for ensuring that property owners in high-risk areas have sufficient flood insurance coverage under federal law.

Highlands, a $125 million-asset company, was ordered to pay $2,565 to the National Flood Insurance Program. The $700 million-asset New Peoples will pay $4,560.

The Fed also entered into a written agreement with North Georgia Community Financial Partners in Calhoun, Ga., on Oct. 3. The board of directors at the $125 million-asset company agreed to ensure that it complies with a consent order issued by the Office of the Comptroller of the Currency in July. The OCC order requires North Georgia to reduce troubled assets, improve loan portfolio management and maintain a minimum Tier 1 capital ratio of at least 9% and total risk-based capital of at least 13%, among other obligations.

The Fed agreement with North Georgia further orders the company to refrain from paying dividends and incurring or guaranteeing debt without regulatory approval. North Georgia must submit progress reports to the Federal Reserve Bank of Atlanta within 45 days after the end of each quarter.

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