Four prohibitions, one CMP among FDIC’s February enforcement actions

This story is updated to reflect a clarification published by the FDIC following its initial announcement.

The 20 enforcement actions on the Federal Deposit Insurance Corp.’s (FDIC) February list, released Friday, included five orders that lifted previous prohibitions, four new prohibitions, two voluntary termination of insurance orders, one order to pay a civil money penalty, a prompt corrective action, and seven terminations of previous consent orders, the agency said.

Of the 20 orders, one – approval of a voluntary termination of deposit insurance – was in January.

In its announcement, the agency said it has no administrative hearings scheduled for April.

The civil money penalty, totaling $5,000, was ordered to be paid by Matthew Dudley Stanaland. According to the order, FDIC determined that Stanaland, while an institution-affiliated party of The Trust Bank in Lennox, Ga., “breached his fiduciary duty and recklessly engaged or participated in unsafe or unsound banking practices by kiting checks between his accounts at the Bank and another local bank in 2013 and 2014.”

The four prohibition orders bar the following individuals from participating in the future in the affairs of any federally insured financial institution:

  • Walker Russell Harter, Sr. – The FDIC said it determined that while he served as chairman, chief financial officer, and executive vice president of Allendale County Bank, Fairfax, S.C., Harter (1) paid himself an unauthorized “golden parachute” payment, and (2) made a loan to a company which he controlled and used the proceeds to pay off family members’ loans in anticipation of the bank’s failure and after the transaction was reversed, charged off certain loans.
  • Phyllis R. Lanning – FDIC determined that Lanning, while a teller and customer service representative at Community State Bank, Coffeyville, Kan., misappropriated approximately $150,000 from a customer’s deposit account and concealed the withdrawals from the customer and his successor beneficiary by directing bank-generated account statements away from the customer and transmitting self-generated false statements to the customer instead.
  • S. Rene Brozovich – While president and a director of The Farmers and Merchants State Bank of Argonia, Argonia, Kan., Brozovich repeatedly extended credit to a borrower in an amount that, when aggregated with the borrower’s existing debt, was well in excess of the borrower’s capacity to repay, FDIC determined. Brozovich’s misconduct resulted in significant loss to the bank, it said.
  • Robert Daniel Newcomb, Jr. – FDIC determined that Newcomb, as a loan officer and a Vice-President/Financial Center Manager III of Firstbank, Nashville, Tenn., knowingly approved the bank extending secured credit to borrowers and the security: (1) was over-valued; (2) did not exist; or (3) was not owned by the borrower.

FDIC Makes Public February Enforcement Actions

Enforcement decisions