The Federal Reserve has banned the former president, chairman and CEO of a failed Maryland bank from the industry.
The Fed, in an enforcement order issued this week, also suggested that Jacob Goldstein's influence over the board at NBRS Financial Bank played a role in the bank’s failure. The order said that Goldstein improperly used his position to approve loan decisions from which he ultimately benefited.
“The bank failed, in part, because of Goldstein’s dominant influence over the bank’s operations which limited the institution’s ability to overcome its deteriorating financial condition and Goldstein’s engaging in improper business practices for his own benefit,” the order said.
The Fed asserted that NBRS approved a $250,000 to a director’s son, unaware that Goldstein had asked the borrower to take out the loan on his behalf. In another instance, the Fed said the bank approved a $100,000 loan to a company in which Goldstein owned a minority stake.
Goldstein, in both instances, voted for the loan approvals without disclosing to the board that he would personally benefit from them, the order said.
Goldstein joined NBRS, of Rising Sun, Md., in 2001. In addition to his leadership roles, he was also the chief lending officer and a member of the bank’s loan committee until his February 2012 resignation, the Fed said.
NBRS, which struggled with nonperforming loans and insufficient capital, had about $188 million in assets and five branches when it was closed by regulators in 2014 to Howard Bank in Ellicot City, Md.