The Daily Fuckup

The Federal Reserve announced on July 16, 2026, that it had issued a prohibition order against James Burns, the former chief lending officer of Heritage State Bank in Lawrenceville, Illinois. The underlying order became effective July 9, 2026. The Fed said Burns agreed to the order, which bars him from participating in the affairs of any institution covered by the Federal Deposit Insurance Act without prior written approval. ([federalreserve.gov](https://www.federalreserve.gov/newsevents/pressreleases/enforcement20260716a.htm))

According to the order, Burns served as Heritage State Bank’s chief lending officer from 1999 until the bank merged with The First National Bank of Carmi on Dec. 1, 2020. The Fed said that around 2016 he caused the bank to approve at least four loans backed by appraisals that had been altered to show higher property values than those in the originals sent by the appraisers. It also said that on at least 25 other occasions before the merger, Burns failed to make sure loans and renewals were supported by appraisals from appraisers licensed in the state where the appraisal was conducted. ([federalreserve.gov](https://www.federalreserve.gov/newsevents/pressreleases/files/enf20260716a1.pdf))

The order says Burns ignored inconsistencies and irregularities that should have raised questions about the appraisals’ accuracy. It also says that after the merger, the surviving bank re-appraised the collateral, foreclosed on some of the loans, and sold the collateral for substantially less than the original appraisal values, producing losses for the successor bank. ([federalreserve.gov](https://www.federalreserve.gov/newsevents/pressreleases/files/enf20260716a1.pdf))

The Fed said Burns’ conduct amounted to violations of law or regulation, breaches of fiduciary duty, or unsafe or unsound banking practices, and that it involved personal dishonesty or a willful or continuing disregard for the bank’s safety and soundness. The order also says Burns must cooperate with the Fed in any related enforcement action against other former bank insiders. ([federalreserve.gov](https://www.federalreserve.gov/newsevents/pressreleases/files/enf20260716a1.pdf))

This is not a market-moving case, but it is a clean example of how bank supervision often shows up after the damage is documented. The record here is specific: altered appraisals, licensing failures, foreclosure losses, and a formal order that ends Burns’ ability to work in the industry without approval. That is the part worth watching, not the usual hand-wringing about oversight in the abstract. ([federalreserve.gov](https://www.federalreserve.gov/newsevents/pressreleases/enforcement20260716a.htm))