Federal Reserve Board issues enforcement actions with former employee of Atlantic Union Bank and former employee of Frost Bank

The Federal Reserve Board has issued enforcement actions against two former bank employees, one for CARES Act loan fraud and another for embezzlement [1]. Crystal Moore, a former employee of Atlantic Union Bank in Richmond, Virginia, is subject to a consent prohibition order for fraud related to a Coronavirus Aid, Relief, and Economic Security (CARES) Act loan [1]. Separately, Jesse Romo, a former employee of Frost Bank in San Antonio, Texas, is subject to a consent prohibition order for embezzling bank funds [1]. The Federal Reserve announced the actions on Thursday [1]. These enforcement actions occur in a regulatory landscape shaped by past financial crises. The 2008 financial crisis, partly caused by deficiencies in regulation and predatory lending, led to a severe global recession and prompted massive government interventions to stabilize the financial system [4]. The crisis contributed to the U.S. entering a deep recession, with nearly 9 million jobs lost during 2008 and 2009 [2]. In response to the 2008 crisis and the subsequent economic downturn caused by the COVID-19 pandemic, the U.S. government enacted stimulus measures including the CARES Act, the program central to one of the cited fraud cases [1][2]. Federal labor law sets minimum standards for employee rights and duties, but does not preclude regulatory action for criminal misconduct by bank employees [3]. The Federal Reserve's enforcement actions are a standard regulatory tool to prohibit individuals from future employment in the banking industry following proven malfeasance [1].