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Sunday, Apr. 20, 2014

FDIC rules on Emmetsburg bank loan officer

Tuesday, May 1, 2012

In April 2010, a routine audit revealed alleged violations of lending regulations and a pattern of misconduct by a Iowa Trust & Savings Bank loan officer, Richard L. Jones.

The Federal Deposit Insurance Corporation has issued an order of prohibition from further participation for Jones, who entered into a stipulation and consent to the issuance.

Based on the findings of the FDIC issuance, Jones "willfully violated state lending limit restrictions and concealed the true amount of credit extended to a borrower by means of a series of accommodation loans as an institution-affiliated part of the Iowa Trust & Savings Bank" in Emmetsburg.

"In our 82-year history, we have never experienced a similar situation. Our internal and regulatory safeguards were -- and continue to be -- effective. We are pleased that federal and state bank regulators, and agents from the Federal Bureau of Investigation, Office of Inspector General and the Iowa Department of Criminal Investigation, performed investigative services in a timely and professional manner," Kris Absurd, president and CEO of Iowa Trust & Savings Bank, said.

Absurd added, "As the case remains under civil and criminal investigations, please refer to the Administrative Enforcement Action provided on the FDIC website for additional information."

The report stated Jones' actions "involve personal dishonesty on the part of the respondent or demonstrate the respondent's willful and/or continuing disregard for the safety or sound of the bank."

As a result of Jones' consent, the FDIC prohibited from "participating in any manner in the conduct of the affairs of any financial institution ..."

"Iowa Trust & Savings Bank worked closely with the FDIC to investigate a case involving a former loan officer," Ausborn said. "No customer deposit accounts were affected, and the former employee has agreed to an order of prohibition from further participation and a civil money penalty."

Jones immediately resigned when the investigation began, Ausborn said in a release. The bank president and CEO insisted that no customer deposit accounts were affected, and this, along with the confidential nature of the investigation, prevented an earlier release of this information.

Iowa Trust & Savings Bank has locations in Emmetsburg, Laurens and Cylinder.



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