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A recent FDIC Order removed Harry C. Calcutt III from office, banned him from banking, and imposed a civil money penalty, which is now on appeal. Was he fairly treated, as required by law? We don’t think so.

It is not just Mr. Calcutt who should be concerned. Every bank director and officer is subject to the same laws and to the FDIC’s (or the other federal banking agencies’) interpretation of those laws.

We all know that bank examinations can sometimes be a wild ride. The FDIC’s examination in this case was especially so, according to the record. Questions about examiner bias have been raised, yet Mr. Calcutt’s attorneys were not able to cross examine the examiner during the latest ALJ hearing about the examiner’s seemingly inappropriate contact with a borrower who was central to the case.

The results of the examination then served as a basis to pursue Mr. Calcutt.

Our amicus brief also expressed concern with the FDIC’s interpretations of statutory terms that enabled the agency to cast a wide net in supporting a removal action against Mr. Calcutt. These interpretations, if applied in other cases against bank directors, will elevate their personal liability and reputation risks.

The loan transactions in question occurred more than 11 years ago during the Great Recession. They involved loan workouts, on which the agencies historically have given banks some latitude and encouragement to assist borrowers and help salvage the loans.

Barack Ferrazzano Kirschbaum & Nagelberg LLP, a nationally recognized banking law firm based in Chicago, prepared the AABD brief.