May 20, 2016 Share

Rainsville Council ends 30+year relationship with city’s bank

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The Rainsville City Council met last week for the first time in their new council chambers at the newly renovated annex building. The council voted last week to end a 30+year relationship with the city’s bank, First Bank of the South.

By Joseph M. Morgan

RAINSVILLE, Ala.—The Rainsville City Council voted last week to end a 30+year relationship with the city’s bank, First Bank of the South, following news that the bank would be merging with First State Bank where Mayor Nick Jones works as a loan officer, .

The Rainsville City Council voted 4-2 in favor of severing the longtime relationship with the Rainsville bank and transferring all of the cities accounts to First Southern State Bank. Councilman Brandon Freeman was the only member of the council to vote against ending the relationship with the Rainsville business. The motion was brought forth by Councilman David Holt. Holt, who has announced that he will not be running for re-election to the council, said the purpose of the move was to avoid what he envisions could be a future potential conflict of interest.

Jones said precedence in other municipalities in Alabama where similar situations have arisen dictate that a continued relationship with the bank would be completely appropriate because the business relationship was established decades prior to the merger. To be certain, Jones said he reached out to the Alabama Attorney General’s Office to confirm that continuing business with the bank would not be inappropriate.

“In an effort to ensure that this business transaction would not create a conflict of interest in my role as mayor of our city, I sought guidance from the Alabama Attorney General’s Office,” Jones said. “I found three separate opinions and a new state statute that pertain to this particular subject. It is my belief that the city’s relationship with First Bank of the South, which will become First State Bank, is appropriate especially given that the relationship began long before this business transaction was initiated.”

The council discussed the fact that Councilman Roger Lingerfelt owns stock in First Bank of the South, a fact that did not deter the council from ending the relationship when Lingerfelt was elected four years ago.

Jones told the council that the conflict could be avoided and the city could continue its relationship with the bank by simply removing himself from any future negotiations or votes that deal with transactions between First State Bank and the city.

Ultimately, the solution would fall upon deaf ears, with the council moving forward to end the more than 30-year relationship with the bank.

Updated Wednesday, May 25 at 7:08 p.m. 

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