August 16, 2022
Federal Reserve Board proclaims it has fined EagleBank $9.5 million for violation of the Board’s insider lending regulation and has completely barred its former CEO and chairman from the banking business
For launch at 4:00 p.m. EDT
The Federal Reserve Board on Tuesday introduced that it has fined EagleBank, of Bethesda, Maryland, $9.5 million for violation of the Board’s insider lending regulation. The financial institution improperly prolonged credit score to entities owned or managed by its then-CEO and Chairman, Ronald D. Paul.
The Board discovered that EagleBank had poor inner controls over insider lending practices between 2015 and 2018, which allowed the financial institution to increase credit score totaling practically $100 million to entities that Paul owned or managed, together with sure household trusts, with out making applicable disclosures to, or acquiring required approvals from, a majority of the financial institution’s board of administrators. These inner management deficiencies additionally prolonged to the financial institution’s supervision of lending workers, who permitted Paul to take part in issues through which he had a battle of curiosity. The Board additionally cited EagleBank for third-party danger administration deficiencies over the identical interval that resulted in insufficient oversight of contracts between the financial institution and a neighborhood authorities official.
As well as, the Board introduced that it has completely barred Paul from employment within the banking business and assessed a $90,000 wonderful towards him for his central function within the financial institution’s violations of legislation and unsafe and unsound practices.
Along side these actions by the Board, the U.S. Securities and Trade Fee at this time introduced its personal settlement of actions towards Paul and EagleBank’s holding firm, Eagle Bancorp, Inc. In whole, the financial institution and holding firm pays roughly $22.9 million and Paul pays roughly $521,000 to settle the company actions.
The Board previously barred EagleBank’s former Normal Counsel Laurence E. Bensignor from banking for his function in EagleBank’s unsafe and unsound lending practices.
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August 16, 2022