FDIC Reimposes Lifetime Ban, Fine On Former Bank CEO After Supreme Court Remand
By CU Today Staff —
WASHINGTON—The Federal Deposit Insurance Corp. has reaffirmed a lifetime industry ban and $125,000 civil money penalty against former Northwestern Bank CEO and chairman Harry Calcutt III, concluding that his conduct in connection with a troubled borrower relationship at the Michigan bank still warranted sanctions even after the U.S. Supreme Court ordered the agency to revisit the case under a stricter legal standard, Law360 reported.
The case stems from the collapse of a large lending relationship involving a group of family-owned businesses that owed approximately $38 million to Northwestern Bank during the financial crisis. Regulators alleged Calcutt engaged in unsafe and unsound banking practices and breached fiduciary duties in connection with a 2009 restructuring transaction designed to keep the loans current. The FDIC originally ordered his removal from banking, prohibited him from participating in the industry, and assessed a $125,000 penalty.
In 2023, the U.S. Supreme Court unanimously ruled that the Sixth Circuit improperly upheld the FDIC’s sanctions using reasoning the agency itself had not adopted. The high court sent the matter back, directing the FDIC to apply the proper proximate-cause standard and determine whether Calcutt’s actions directly caused harm to the bank.
Following that review, the FDIC again concluded that Calcutt’s conduct caused harm to Northwestern Bank and justified both the prohibition order and monetary penalty. The agency’s decision was included among enforcement actions published by the FDIC for April 2026, marking the latest chapter in a case that has been closely watched by banking lawyers because of its implications for agency enforcement authority and judicial review of administrative sanctions, Law360 noted.
Originally reported by CU Today.