FDIC July orders include $85k CMP over unsafe or unsound practices

Five of the enforcement actions executed in July by the Federal Deposit Insurance Corp. (FDIC) involved civil money penalties that ranged from a $1,875 penalty against a bank for federal flood insurance violations, to an $85,000 penalty against a banker for unsafe or unsound practices.

In the latter case, Joshua Aaron Barnes was found by the FDIC to have engaged in unsafe or unsound practices and breached fiduciary duties.

Barnes, during the period May 2018 through January 2019, in his capacity as senior vice president and loan officer of FNB Bank (now known as Cadence Bank), Tupelo, Miss., is reported to have “generated a series of improper extensions of credit for the benefit of a large deposit/borrowing customer. In connection with said misconduct, Respondent failed to disclose the true nature and purpose of the subject transactions.”

The agency said Barnes’ “practices and breaches were part of a pattern of misconduct which caused the Bank to suffer more than a minimal financial loss.”

In addition to paying an $85,000 civil money penalty, Barnes reportedly must, within 180 days of the order, attend 50 hours of training that include blocks of instruction on banking ethics and prudent credit underwriting practices.

In all, the FDIC said its July administrative actions included 10 orders and two notices. Besides the above, the administrative enforcement actions also included two orders that combined a prohibition order and order to pay CMP; ; four prohibition orders; one order modifying a prohibition order; one order of termination of deposit insurance; and one order to pay CMP for pattern or practice violations of the Flood Disaster Protection Act.

July 2023 Enforcement Decisions and Orders