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Embattled Michigan Rep. Brian Banks, who won three terms to the state House despite eight prior felony convictions, resigned his office Monday after negotiating a plea agreement involving a $3,000 bank loan that cost him his seat and perhaps his political future.

Banks was charged last year with two felony counts of uttering and publishing each punishable by up to 14 years in prison — one felony count of using a false pretense to defraud or cheat, and one misdemeanor count of making false statements of financial condition.

Banks pleaded guilty to the misdemeanor charge Monday before 3rd Circuit Judge Michael Hathaway and will be sentenced Feb. 17 in the Wayne County courthouse. The charge carries a penalty of up to a year in jail.

The Harper Woods Democrat was accused of using false documents to try to obtain a $7,500 personal loan from a local credit union. He received $3,000 after initially not being approved by the Detroit Metropolitan Credit Union on East Jefferson.

An affidavit from Peter Ackerly, a special agent investigator with the attorney general’s office, reported Banks lied on his application using pay statements from IHI Attorneys + Consultants of Farmington Hills to get the loan. Banks said the loan was to pay for a course as he prepared for the Michigan Bar Exam.

The bank ended up suing Banks for non-payment on the loan. He agreed to repay 90 percent plus interest and eventually repaid the reduced amount, according to charging documents.

Banks’ resignation comes on the heels of a volatile two-year session in Lansing marked by unusually high turnover and personal turmoil in the state Legislature.

Former Sen. Virgil Smith, D-Detroit, resigned in late March after pleading guilty to malicious destruction for shooting up his ex-wife’s car. Republican Rep. Todd Courser of the Lapeer area stepped down and GOP Rep. Cindy Gamrat of Plainwell was expelled in September 2015 over allegations they misused state taxpayer resources in an attempted cover-up of their extramarital affair.

Banks’ tenure in Lansing has been tumultuous and included accusations of sexual harassment by a former staffer in a case the state House quietly settled for $12,000 in the fall of 2015.

Michigan Attorney General Bill Schuette’s office filed the felony charges against Banks in June. Monday’s plea came as jury selection in his criminal trial was about to get underway.

“As an elected official, you carry a higher burden of responsibility and are expected to act as a role model in your community,” Schuette said in a statement. “Former Rep. Banks violated the trust placed in him by his neighbors and constituents.”

Banks has eight prior felonies from 1998 to 2004 for writing bad checks and credit card fraud. Banks could have faced up to life in prison as a “habitual offender” with the felony charges.

House Speaker Tom Leonard, R-DeWitt, said Monday that Banks’ former 1st District legislative office will remain open to handle constituent services despite his resignation. Gov. Rick Snyder would have to call a special election to fill the open seat.

“Rep. Banks had one legal issue after another during his time in public office,” Leonard said in a statement. “I am glad to see he is finally taking responsibility for his actions, and hopefully today’s plea agreement provides the fresh start he needs.”

House Minority Leader Sam Singh, D-East Lansing, said he respected Banks’ decision to resign, wished him the best and noted the former lawmaker “was a passionate advocate for his district.”

Banks’ resignation letter specified he is stepping down immediately, according to the Attorney General’s Office. House Clerk Gary Randall said he received the letter but cannot release it until it is read into the public record during Tuesday’s legislative session.

State Rep. Sherry Gay-Dagnogo, D-Detroit, one of Bank’s closest allies in the Michigan Legislature, was with him at the courthouse Monday and said Banks was motivated to take the plea deal out of concern for his mother, whom he takes care of.

“Any mother would not want to face their child having to possibly serve life in prison, especially for something so frivolous as this,” she said in a phone interview Monday afternoon.

Gay-Dagnogo called the charges against Banks a “well-calculated and politically motivated” attempt to deny him re-election last fall. He has admitted his role in the scheme, she said, but did not act with the intent to defraud and has repaid the loan in question.

“The people of his district have lost a champion that fought on behalf of Detroit Public Schools, has fought to protect auto no-fault as we have it in Michigan, has fought for Democracy,” Gay-Dagnogo said. “The people lost today.”

Schuette, a Republican, denied this summer the charges of a politically motivated prosecution against Banks during a Detroit News interview. He noted the case came from the Democratic Obama administration.

“The fact is the FBI worked on this, passed it to the U.S. Attorney and it came to the Department of Attorney General,” Schuette told The Detroit News Editorial Board and reporters. “That’s what happened.”

Banks had served as chairman of the Detroit Caucus in the state House. Gay-Dagnogo, vice chair of the caucus, said it is “much too soon” to speculate who could replace him.

Banks’ attorney, Ben Gonek, told reporters after Banks’ arraignment in June the charges against his client were politically motivated and he alleged Banks was targeted because of his vote on key issues such as the Detroit Public Schools’ financial bailout by the state and a controversial insurance program, called D Insurance, promoted to Detroiters.

Banks fended off five opponents in August, and in November, the lawmaker earned 66 percent of the vote in his battle to retain his seat in Michigan’s District 1, which includes Harper Woods, Grosse Pointe Woods, Grosse Pointe Shores and a portion of northeast Detroit.

Pam Sossi of Harper Woods, who lost 45 percent to 36 percent to Banks in the August Democratic primary, issued a statement applauding Banks for resigning rather than “dragging the constituents of District 1 through a lengthy felony trial.”

Sossi made clear she plans to run for the seat again when a special election is called.

bwilliams@detroitnews.com

(313) 222-2027

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