Fed Bans Former Bank CEO After $3.5M Loss From Loans to Relative's Business

According to the Federal Reserve, former Bank of Eufaula CEO Thomas Engelbrecht was banned from the U.S. banking industry and fined $125,000 for violating lending policies and causing over $3.5 million in losses by directing loans to a struggling business owned by a close relative between 2020 and 2023.

The Fed said Engelbrecht repeatedly approved large overdrafts for his relative's account despite violations of bank policy and the account's inability to repay. The Federal Reserve's Main Street Lending Program, which supports small businesses, lost $1.88 million on its portion of the financing. Engelbrecht also provided an additional $200,000 in personal loans to the business.