By Associated Press
A lawsuit filed against Regions Financial Corp. alleges that bank holding company mismanaged a charitable trust named for a former Alabama secretary of state — charging exorbitant fees and steering scholarship money to children of the trust board members.
The suit, dated July 7, was filed in Montgomery County Circuit Court by family members of Mabel Amos, who served as Alabama Secretary of State from 1967 to 1975, al.com reports.
The lawsuit contends that the board trustees benefited personally “using the funds in the Trust to educate their children at out-of-state expensive colleges and were not in financial need, while members of Amos’ immediate family were in financial need.”
The suit seeks to remove Regions as the trustee bank and require it to pay back all distributions to the trustee children, as well as compensatory and punitive damages.
In 1993, Amos filed her will establishing a memorial trust in her name with Union Bank, which eventually merged with Regions.
According to the lawsuit, Regions began charging “outrageous” fees when oil was discovered on Amos’ property, in contrast to “reasonable” fees when there were only natural gas wells there. For example, in the suit the plaintiffs claim that Regions was paid about $7,000 for spending five hours a week administering the trust in 2010. Within a year, that same five hours a week cost $92,736. From 2002 to 2018, the suit claims, the trust paid more than $1 million in administration fees to Regions.
At the same time, the number and dollar amount of scholarships also increased, from $21,794 through five scholarships in 2011, to $214,000 among 17 scholarships two years later.
Among those scholarships were “thousands of dollars” for the children of two attorney trustees, the suit claims, who did not attend colleges in Alabama, which was not Amos’ intent in setting up the trust.
In addition, Lagniappe Mobile reported the son and daughter of Alabama Ethics Commission Executive Director Tom Albritton received $120,000 from the trust to attend the University of Texas.
Al.com reached out to Jennifer Elmore, vice president of corporate media and public relations for Regions, who would not comment directly on the suit.
“Regions’ fee is less than one percent of the market value of the assets under management, and that is consistent with our standard rates and competitive with industry rates,” Elmore stated.