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FinanceFed bans former Illinois bank executive for approving loans based on inflated appraisals
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The Federal Reserve has banned James Burns, former chief lending officer at Heritage State Bank in Lawrenceville, Illinois, for approving loans based on inflated appraisals. Burns, who served from 1999 until the bank's acquisition by First National Bank of Carmi (FNBC) in 2020, approved four loans using altered appraisals that reflected inflated property values. He also failed to ensure at least 25 loans or renewals were appraised by licensed appraisers and ignored inconsistencies. After FNBC foreclosed on some loans, collateral sales yielded substantially less than original appraisal values, causing financial losses. The Fed stated Burns' conduct involved violations of law, breaches of fiduciary duty, and personal dishonesty. Burns consented to the order and agreed to comply. FNBC has since been renamed First Bank.
Source report
The Federal Reserve logo is visible on the William McChesney Martin Jr. Building on December 9, 2025, in Washington, DC. (Banking Dive · Andrew Harnik / Staff via Getty Images)
By Gabrielle Saulsbery Tue, July 21, 2026 at 5:05 AM PDT | 1 min read
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The Federal Reserve has banned a former bank executive in Illinois for approving loans based on inflated appraisals.
James Burns, who served as chief lending officer at Heritage State Bank in Lawrenceville from 1999 until its acquisition by nearby First National Bank of Carmi (FNBC) in 2020, approved four loans based on appraisals that were altered to reflect inflated property values, according to the Fed.
Additional Violations
Separately, Burns:
- Failed to ensure that at least 25 loans or loan renewals were appraised by licensed appraisers
- Ignored inconsistencies in the appraisals
The appraisals valued collateral at levels significantly higher than when the same properties were re-appraised by FNBC post-merger.
Financial Impact
When FNBC foreclosed on some of the affected loans, its collateral sale "yielded substantially less than the original appraisal value, causing a loss to FNBC," according to the Fed.
Fed Statement
"Burns' conduct constituted violations of law or regulation, breaches of fiduciary duty, or unsafe or unsound banking practices, and involved his personal dishonesty or demonstrated his willful or continuing disregard for the Bank's safety and soundness," the Fed said.
Consent and Compliance
Burns consented to the Fed order and agreed to comply with its provisions.
Bank Response
FNBC has been renamed First Bank. A call to its main line went unanswered Tuesday morning, and a request for comment by CEO Nikki Roser was not immediately answered.
Source
Yahoo FinanceWestern
Part of this Story
Federal Reserve Bans Former Illinois Bank Executive for Inflated Appraisal Loans