Former chief lender pays $6,000 CMP

The OCC has issued a Consent Order to Craig E. Reay, former chief credit officer for First Place Bank (merged), Warren, Ohio, directing that Reay pay a civil money penalty (CMP) of $6,000, and that he, among other actions, provide the president or CEO of the institution at which he currently works with a copy of the order, and, with respect to any future offer of employments by an insured depository institution, he will similarly provide the president or CEO of that institution with a copy of the order.

The order indicates that the Comptroller of the Currency found that:

• During the period from approximately March of 2009 to March of 2011, Reay caused the Bank to fail to properly identify and account for problem assets, to accurately report its income and capital, and ensure an adequate Allowance for Loan and Lease Losses balance.
• Reay participated in the approval of extensions of credit without determining the borrowers’ ability to pay. The purpose of the extensions of credit was to enable troubled borrowers to make payments on pre-existing loans, thus, masking the true condition of the lending relationship and causing the Bank to continue to improperly accrue interest.
• Reay failed to obtain updated collateral evaluations before modifying or extending additional credit.
• Reay failed to follow examiner loan classifications and to risk rate assets in a manner consistent with the asset classification system.
• By reason of the foregoing conduct, Reay engaged in violations of 18 U.S.C. §1005; 12 C.F.R. 564.3(a)(7) (now 34.43); and 12 C.F.R. § 560.170 (now 160.170), engaged in reckless unsafe or unsound practices, and breached his fiduciary duty to the Bank; which violations, practices, or breaches were part of a pattern of misconduct, and caused a significant loss to the Bank.