Haynes v. Federal Deposit Insurance Corp.

MEMORANDUM

Petitioner Steven D. Haynes seeks review of a prohibition order and penalty imposed by the Board of Directors of the Federal Deposit Insurance Corporation (“the Board”). 12 U.S.C. § 1818 (h)(2); 5 U.S.C. § 701-706 . Upon the recommendation of an administrative law judge (“ALJ”), the Board, pursuant to 12 U.S.C. § 1818 (e), prohibited Haynes from participating in the affairs of any insured depository institution and, pursuant to 12 U.S.C. § 1818 (i)(2), imposed a civil monetary penalty of $75,000. We deny the petition.

The Board’s prohibition order is supported by substantial evidence. See De La Fuente v. FDIC, 332 F.3d 1208, 1220, 1222 (9th Cir. 2003). The Board may prohibit an officer from banking if the officer participated in: (1) misconduct; (2) that had an impermissible effect; and (3) that was accompanied by a culpable state of mind. 12 U.S.C. § 1818 (e)(1).

Haynes’ actions constituted misconduct for two reasons, either of which would support the Board’s order. See De La Fuente, 332 F,3d at 1225. First, Haynes engaged in an unsafe or unsound banking practice by disregarding the borrower’s ability to repay. As the Board found, Haynes disregarded borrowers’…