Fed bars one person over fraudulent credit extensions; lifts enforcement action after 16 months

The Fed’s enforcement order with Gayle Kendrick was signed April 25.

The Federal Reserve Board said Thursday that it issued a prohibition order against Gayle Kendrick, a former employee and “institution-affiliated” person at Regions Bank, Birmingham, Ala., who allegedly made at least 13 credit extensions to bank customers without their knowledge. Separately, the Fed terminated an enforcement action against Rock Bancshares, Inc., and its subsidiary Heartland Bank, both of Little Rock, Ark.

The consent order with Kendrick says that while he was a branch team leader, he received incentive compensation for credit extensions, including 13 fraudulent ones flagged as having occurred between Feb. 4, 2016, and May 25, 2017. He is cited for engaging in an unsound, unsafe banking practice and was fired from his job at the bank.

Under the order, Kendrick, without prior approval of the Fed and any other relevant federal regulator, is barred from participating “in any manner” in the conduct of the affairs of any insured depository institution, its holding company or affiliate; and he is denied any voting rights with respect to any such institutions. Any violation of the order could draw civil money penalties.

The Fed’s previous order with Rock Bancshares and Heartland Bank was entered into Dec. 13, 2016, and terminated this April 23. It required the firms to resolve debt issues, strengthen board oversight of bank management and operations, and, among other things, improve loan delinquencies and make proper charge-offs.

Federal Reserve issues enforcement order with prior institution-affiliated party; terminates enforcement order