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  • Donald V. Watkins

New Judge Assigned in FDIC Case

Updated: Jul 30, 2018

By Donald V. Watkins ©Copyrighted and Published on July 25, 2018


In “Surviving Hatred in Alabama”, I described how former Alabama governor Robert Bentley ordered state government agencies to target me for destruction after online journalist Roger Alan Shuler and I exposed Bentley's marital cheating and public corruption scandal with his lover, Rebekah Caldwell Mason. Bentley was also the Chief Magistrate of Alabama when the order was given. Yet, he provided state law enforcement officials with no evidence that Shuler or I had engaged in any wrongdoing.

 

To his credit, then-Alabama Law Enforcement Agency Chief Spencer Collier refused to open the criminal investigation on me that Bentley requested. Bentley's June 23, 2018 deposition testimony in Collier's wrongful termination case affirms this fact.


Unlike Spencer Collier, John D. Harrison, then-Superintendent of the Alabama State Banking Department, went along with a separate Bentley order to place my Birmingham-based independent bank and me under heightened regulatory scrutiny. Working in concert with the Federal Deposit Insurance Corporation (“FDIC”), the State Banking Department launched a full-scale, coordinated "Blitzkrieg" investigation of Alamerica Bank and me that has been ongoing for five years. To provide political cover for this illegal regulatory activity, the State Banking Department encouraged the FDIC to take the lead in trying to run me out of the banking business.


As an accommodation to the State Banking Department, the FDIC trumped-up baseless allegations that I violated Regulation O with respect to a loan the bank made to one of my business partners and a loan that was made to one of my sons. Regulation O governs bank loans to executives and directors of the bank. I was chairman of the bank at the time these loans were made, but I had no role in their application process, underwriting, or approval.


For five years, the FDIC has steadfastly refused to recognize that both of these loans fell squarely within the well-known, published exceptions to Regulation O. The agency has recognized the exceptions to Regulation O for similarly situated bank officers and directors at other regulated banking institutions. Furthermore, the FDIC’s internal emails describe my request for equal treatment under Regulation O as “buffoonery”.


Earlier this year, I formally answered the FDIC’s allegations and denied all of the charges involving the Regulation O, while asserting my affirmative defenses to the charges. I also objected to the process used by the FDIC to select the Administrative Law Judge (“ALJ”) who was assigned to my case, which has indefinitely stayed on June 27, 2018 at my request.

In "Surviving Hatred in Alabama", I predicted that my case would likely have to start over in light of a June 2018 U.S. Supreme Court ruling that the process used by federal agencies like the FDIC and SEC for selecting and assigning ALJs was unconstitutional. I was right.


This afternoon, my legal team received a “Notice of Reassignment” from the Hon. Christopher B. McNeil, the new ALJ who has been assigned to my case. ALJ McNeil issued an Order today declaring, “the parties are entitled to a fresh reconsideration of all prior actions by the prior assigned administrative law judge” and modifying the Stay Order to provide each party with a fair and reasonable opportunity to seek reconsideration of all prior actions of the original ALJ.

Alamerica Bank is one of only nineteen African-American-owned banks in the United States. Within this group, Alamerica is the only one that state and federal regulators are actively trying to collapse (without any success to-date). Industry insiders recognize that this regulatory abuse is driven by personal animus and political motivations of certain top FDIC officials.


Despite the sustained efforts of state and federal bank regulators since 2013 to harm Alamerica Bank and me, the Bank’s regulatory capital ratios at the close of 2017 exceeded the 13.3% national average and were among the best in the banking industry. 


For the record, no judicial body has ever found that I have violated any state or federal banking industry rule or regulation. 


John D. Harrison, the former Superintendent of the State Banking Department, announced on June 23, 2016, that he was retiring, effective on June 30, 2016. Harrison gave no reason for his abrupt retirement announcement.


Governor Robert Bentley resigned in disgrace after pleading guilty to ethics violations on April 10, 2017.


PHOTO: Administrative Law Judge Christopher B. McNeil


© 2020 by Donald V. Watkins, P.C.