FSA Bans Reverend Who Lost $1 Million on Forbidden Loans
The U.K.’s Financial Services Authority banned Reverend Carmel Jones for approving unlawful loans while serving as chairman of The Pentecostal Credit Union, which resulted in losses of 670,000 pounds ($1 million).
Jones approved 14 loans to a separate church organization, breaching rules that forbid credit unions to lend to other corporations. The FSA told Jones on three occasions that the loans were unlawful, the agency said in a statement on its website today. As a result of the ban, Jones can no longer hold a post at a financial firm regulated by the U.K. regulator.
“This is a disgraceful case of a credit union putting the interests of another organization before those of its members,” Tracey McDermott, FSA director of enforcement and financial crime, said in the statement. “The FSA will not tolerate this conduct.”
The credit union escaped a fine because of the detrimental impact a financial penalty would have on the firm’s members, the FSA said. The credit union, which has 1,600 members and a loan book worth about 5.5 million pounds, replaced its entire management at the watchdog’s request.
“The previous directors made a number of mistakes in relation to the granting of loans and the credit union has suffered financially as a result,” Leslie Laniyan, the new chairman at the credit union, said in an e-mailed statement. “We apologize unreservedly to our members for these actions and thank them for exercising goodwill towards TPCU.”
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