Release Date: June 25, 2014
For release at 3:30 p.m. EDT
The Federal Reserve Board on Wednesday announced that Regions Bank, Birmingham, Alabama, will pay a $46 million penalty for misconduct related to the process followed by the bank in the first quarter of 2009 for identifying and reporting non-accrual loans. The Federal Reserve also issued a consent order requiring Regions Bank to continue to improve its relevant policies and procedures. The Federal Reserve's consent order is being issued jointly with the Alabama Department of Banking, which is assessing Regions Bank a $5 million penalty, and in conjunction with actions by the Securities and Exchange Commission.
The Federal Reserve also announced enforcement actions against three former employees of Regions Bank who were responsible for the misconduct addressed in the action against the bank. The Federal Reserve is initiating administrative proceedings against Thomas A. Neely, Jr., former senior commercial credit executive of the Bank, seeking an order prohibiting him from the banking industry and separately assessing Neely a $2.4 million civil money penalty. The Federal Reserve is also issuing consent orders, jointly with the Alabama Department of Banking, against Michael J. Willoughby, the former chief credit officer of Regions Bank, and Jeffrey C. Kuehr, former head of the Bank's problem loan workout department, prohibiting them from further participation in the banking industry.
The enforcement actions are based on deficiencies in the controls and procedures in place at Regions Bank in the first quarter of 2009 for identifying loans for non-accrual status and for assuring that accurate and complete information was provided to Federal Reserve and Department of Banking examiners in connection with an examination focused on the bank's non-accrual process. The enforcement actions against the former employees are based on their participation in the deficient non-accrual loan process in the first quarter of 2009 and on their providing inaccurate, incomplete, and misleading information to examiners about that process.
Separately, the Securities and Exchange Commission is taking action against the three former employees of Regions Bank for their misconduct in connection with the first quarter 2009 reporting of non-accrual loans. The Securities and Exchange Commission also entered into a deferred prosecution agreement with Regions Financial Corp., Regions Bank's parent holding company.
For media inquiries, call 202-452-2955SEC Announces Fraud Charges Against Three Former Regions Bank Executives in Accounting Scheme