Capital One (COF), Nationstar (NSM) and Flagstar Bancorp (FBC) are among 10 banks and servicers that have been slow to process payouts of insurance claims to homeowners hit by Hurricane Sandy, New York Governor Andrew Cuomo charged on Tuesday.

The state's Department of Financial Services said that the firms are withholding roughly $41 million in proceeds paid to policyholders by insurers based on claims for damage caused by the storm.

According to the DFS, the banks are holding back roughly 44% of the Sandy-related insurance proceeds they have received, compared with an average of 17% held back by the industry generally.

The withholding arises because insurance companies issue checks jointly to both homeowners and their lenders or servicers, which also must endorse the check before the homeowner can receive the funds. According to the DFS, the co-endorsement requirement is a standard requirement of mortgage loans and insurance contracts.

"While we won't be satisfied until every single victim gets every single dollar to which they're entitled, some banks have continued to lag especially far behind the rest and it's well past time for them to pick up the pace," Cuomo, a Democrat, said in press release.

Superintendent Benjamin Lawsky added in a press release that his department "will keep fighting to make sure these funds get released to speed the recovery."

The state, which says it has reviewed 33 banks nationwide that have paid out roughly $1.1 billion in insurance proceeds to homeowners in the storm's path, has taken a series of steps to speed relief. In February, Cuomo announced that Fannie Mae and Freddie Mac, which own roughly two-thirds of mortgages in New York, had agreed to reduce restrictions that lenders and servicers complained forced them to dole out money to homeowners incrementally while keeping an eye on the status of repairs.

According to the DFS, JPMorgan Chase (JPM), Bank of America (BAC) and Citigroup (NYSE:C) are holding, on average, only 11% of the insurance proceeds they have received, which means they have disbursed 89 cents of every dollar.

Six banks that the DFS did not identify have disbursed more than 90 cents of every dollar.

In contrast, Selene Finance, a mortgage servicer based in Houston, has withheld 71% of the insurance proceeds it has received for a total of roughly $1.9 million. Select Portfolio, another servicer, has withheld 56% of payouts worth $4.9 million, while Astoria Federal (AF) in New York has withheld 48% of proceeds worth $3.7 million, according to state regulators.

Capital One is withholding 45% of proceeds worth $3.7 million, according to the DFS, while Nationstar has withheld 44% of payouts totaling $6 million.

According to the DFS, Flagstar is holding back 43% of payouts worth $2.9 million, Specialized Loan Servicing has withheld 41% of payments worth $1.4 million and OneWest Bank in Pasadena, Calif., has withheld 39% of payments totaling $14.3 million.

SunTrust Mortgage, a unit of Atlanta-based SunTrust Banks (STI), has withheld 39% of payouts totaling roughly $713,000, while Mid-Island Mortgage, servicer based in Westbury, N.Y., has withheld 38% of payments worth $1.2 million, the DFS said.

"Our goal is to ensure our customers get relief as soon as possible," Capital One spokesperson Pam Girardo said in an email. "We immediately release emergency funds, and we work within the guidelines that are prescribed by Fannie Mae and Freddie Mac to disburse funds related to insurance claims for repair or rebuild purposes."

Girardo said that Capital One adjusted the company's polices on payouts recently after Fannie Mae and Freddie Mac eased restrictions on payouts. "The numbers that the state has do not reflect the additional funds released once Fannie and Freddie eased their restrictions," she added.

William Nikosey, a spokesman for Astoria Federal, said in an email that the bank recently adjusted its policy on payouts and now releases 75% of all insurance funds it receives. He added that the bank continues "to work with our mortgage customers individually to guide them through the process in order to accelerate disbursements of insurance funds."

A Flagstar spokesperson declined to comment.

Spokespeople for Selene, Select, Nationstar, OneWest and SunTrust did not respond immediately to requests for comment. Spokespeople for Specialized Loan and Mid-Island Mortgage could not be reached immediately.

Lawsky urged banks and services to adopt a series of best practices his department promulgated last year. They include publishing clearly on their websites the procedures required to release funds, designating a single point of contact for homeowners, and immediately releasing sums that insurers designate as "emergency" or "advance" funds.

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