State House banking chairman hit with FDIC fine

By J. Scott Trubey

The Atlanta Journal-Constitution

The chairman of the panel that oversees banking law in the state House of Representatives has been fined $5,000 by federal bank regulators, after he made overdrafts not allowed because of his role as a bank director.

Rep. Greg Morris, R-Vidalia, told The Atlanta Journal-Constitution the incident that triggered the fine happened a few years ago when he tried to pay property taxes and inadvertently had insufficient funds in an account with the bank were he is a director.

Morris said he resolved the overdraft of around $20,000 the same day with funds from another account.

Morris entered into a consent agreement with the Federal Deposit Insurance Corp. on April 15 to pay the $5,000 penalty. The order was published Friday. An FDIC spokesman declined to comment.

Morris is a board member of Montgomery Bank & Trust of Ailey, about 170 miles southeast of Atlanta. MB&T received a lifeline in December, when a metro Atlanta investment group and customers pumped $14.1 million into the bank to stave off failure.

Morris said he had been cited by regulators before, but not fined, for prior overdrafts. Certain overdrafts are prohibited because they could be considered an improper insider loan. Directors or officers are supposed to have a line of credit or plan to draw funds from other accounts to prevent overdrafts, and Morris did not.

Walt Moeling, banking attorney with the law firm Bryan Cave, said it's a relatively minor violation.

“Director overdrafts seldom impose any threat to the safety and soundness of a bank,” said Moeling. “Nonetheless they are clear violations and the regulators will act when they find repeat offenders.”

Regulators approached Morris about the overdraft incidents within the past year as MB&T sought government approval of the new investors.

“Rather than contest the matter, in the middle of our approval for our recapitalization of the bank, I decided it would be better just to pay the fine and to move on,” Morris said.

Morris' counterpart on the state Senate banking committee, Sen. Jack Murphy, R-Cumming, is being sued in two separate cases by the FDIC.

Murphy is one of eight former insiders at the failed Integrity Bank who were sued by the FDIC earlier this year for alleged gross negligence. He is also the subject of an FDIC suit over a defaulted loan.