Eastern Iowa bankers fined $50K for taking customer information from F&M Bank

The Federal Reserve has fined three Eastern Iowa bankers for taking confidential information from Farmers & Merchants Savings Bank when they left in 2021 to recruit customers to their new employer, a recent order states.

Randy Johnson, Chad Kellogg and Jeffrey Hines — who now work at Collins Community Credit Union — each agreed to pay $50,000; notify the Fed within 10 days if they start working for a Fed-affiliated institution; and tell new bosses at Fed-affiliated institutions about the Board of Governors order, according to a news release.

Each banker’s “misconduct constituted an unsafe or unsound practice and a breach of his fiduciary duties to FMB, and caused harm to FMB,” the order states.

Johnson worked at F&M from 2006 to 2021 and was executive vice president when he left in March 2021 to start work at Collins, which is not supervised by the Board of Governors. Kellogg and Hines were both senior vice presidents for commercial banking at F&M, with Kellogg there from 2006 to 2021 and Hines from 2018 to 2021, the order states.

A lawsuit filed in Linn County in 2021 alleged five former employees, including Johnson, Kellogg and Hines, in March 2021 started forwarding corporate email to their personal accounts and downloading emails to drives and devices. Between March 16 and 23, 2021, 10 of 11 employees at Linn County branches of F&M left and started working at Collins, the suit alleged.

The lawsuit was permanently dismissed Jan. 3, 2023, at F&M’s request.

A Collins Community Credit Union phone directory accessed Thursday listed Johnson, Kellogg and Hines as employees there.

F&M Bank, based in Manchester, has seven locations, including branches in Cedar Rapids, Manchester, Anamosa and Monticello.

The Federal Reserve is the central bank of the United States. It works to “promote the effective operation of the U.S. economy and, more generally, the public interest.” One of the Fed’s most prominent roles is setting long-term interest rates.

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