A former director of a now-defunct Cecil County, MD bank has been barred from ever holding financial services positions, following a review of loans tied to a Glasgow-area residential development.
Last month, the Federal Reserve Board of Governors announced that Lowell McCoy cannot serve in a board or management capacity.
A filing from the Federal Reserve stated that McCoy “while a member of the board of directors of NBRS, engaged in unsafe or unsound banking practices and breaches of fiduciary duty by obtaining loans from NBRS through a third party borrower in order to circumvent applicable lending limits and by failing to disclose the true purpose of the loans.”
McCoy, who had been a major stockholder in the bank, signed off on the agreement with the Federal Reserve, according to a Fed filing.
NRBS, formerly National Bank of Rising Sun, failed in 2014. Assets were acquired by Howard Bank, an institution based in the Baltimore area, as part of an agreement with regulators.
The Cecil Whig (paywall) reported that McCoy, a prominent farmer and former auto dealer, was involved in loans that aimed to prop up the LaGrange residential development in the Glasgow, DE area.
McCoy and the bank’s CEO left the bank and its board after the loans were discovered.
McCoy told the Whig the issue was overblown and that the loans had been paid off. He also took note of losses he suffered from his investment in the bank.
Prior to its loan foray in Delaware, the Rising Sun community bank had been successful and even survived the Great Depression of the 1930s.