James Burns ran Heritage State Bank’s loan book for 21 years. The Federal Reserve just made sure he’ll never run anyone’s loan book again, handing down an order of prohibition on July 16, 2026.
As chief lending officer at Heritage State Bank in Lawrenceville, Illinois, from 1999 until its 2020 acquisition, Burns approved at least four loans backed by appraisals that had been altered to inflate property values. He also let at least 25 other loans or renewals go through without a licensed appraiser signing off, ignoring red flags the Fed says he should have caught.
The bill came due for First National Bank of Carmi, which absorbed Heritage in 2020 and re-appraised the collateral, only to find it worth far less than Burns’s numbers claimed. When the acquirer foreclosed, the collateral sales “yielded substantially less than the original appraisal value,” per the Fed, sticking it with the loss Burns’s due diligence should have prevented.
Bank prohibition orders are the death penalty of banking regulation: indefinite, industry-wide, and reversible only by a vote of the Fed’s own Board. That’s a heavier hammer than a fine, because Burns can’t just write a check and move on. He’s out, full stop.
Burns consented to the order without a fight. First National, now renamed First Bank, didn’t return a call seeking comment. CEO Nikki Roser hasn’t answered either.
— Marcus Webb