Reserve banking

Former Kentucky Bank CEO banned by Federal Reserve

A former bank CEO has been banned from taking on leadership roles in banking after being found guilty of acting improperly regarding a loan.

Carolyn Flynn, former CEO of the Kentucky-based Community Financial Services Bank (CFSB), approved a loan of more than $90,000 to a family member and accessed customer information without authorization, according to a regulatory filing from the Federal Reserve.

The shortcomings – which amounted to “Dangerous and unhealthy termination and customer information practices” – occurred between March 2018 and February 2020. Although the loan was repaid in full, CFSB suffered a financial loss of approximately $1,000 in legal fees, according to the regulatory notice.

Flynn compensated the bank for this loss and retired as CEO and President at the end of March 2020. CFSB Chief Credit Officer Michael Radcliffe succeeded Flynn as CEO on April 1, 2020, while Jason Jones, market president for Marshall County, was promoted to president of the company.

Flynn was banned from “participate in any way in the conduct of business” of any depository institution or holding company. He is also prohibited from having voting rights in any US bank or depository institution.

According to the regulatory notice, Flynn accepted the ban without admitting or denying any allegations.

Flynn left CFSB last year after 44 years with the business, having been hired as an accountant in 1976 when the bank was known as Bank of Benton. During that time, the bank grew from $33 million in assets to more than $1.2 billion, with eight banking centers in Kentucky.