A former banker in Iowa who originated loans in violation of the bank’s policy against conflicts of interest has consented to be barred from future service in a federally insured financial institution, the Federal Reserve Board announced Tuesday.
Joel Shumate, while senior vice president of First Iowa State Bank (Keosauqua, Iowa), between Nov. 4, 2016, and Oct. 3, 2017, originated two loans (and extended the terms for one of them) to a borrower to purchase cattle from him and his father without disclosing the loans’ purpose to the bank, according to the Oct. 18 consent order of prohibition.
The order says the loans were in conflict with bank policies, including policies against conflicts of interest; that the loans resulted in a gain to Shumate; that the loans “are likely to cause a financial loss to the Bank”; and that “originating loans which involve conflicts of interests and extending such loans without required approvals constituted unsafe or unsound banking practices.”
Violations of the order can result in civil or criminal penalties, or both, it says.
Federal Reserve Board issues enforcement action with Joel Shumate