Since then, brighter lines have been drawn between acceptable and unacceptable third-party business relationships, transparency has improved, and companies are wiser about giving their regulators a heads-up.
That may be exactly why the head of Republic First Bancorp in Philadelphia could announce this week that Hill had been named nonexecutive vice chairman even as the bank continues to do business with professional services companies affiliated with Hill.
Republic First said in a regulatory filing Thursday that it paid Hill-affiliated entities $758,000 in 2014 and 2015 for marketing, graphic design, architectural and project-management services.
The $1.7 billion-asset Republic First also disclosed that Hill also has an ownership stake in a company that received $172,000 over the same time period for a land lease tied to one of the company's branches.
The disclosures recall relationships that contributed to Hill's 2007 removal as chairman and CEO of Commerce Bancorp. Those relationships also led to a 2008 cease-and-desist order that imposed constraints on Hill's dealings with banks and remains in effect today.
Hill referred a call about the regulatory filing to Republic First, and CEO Harry Madonna was armed with answers about conflict-of-interest issues.
Madonna said Thursday that his company has "always treated" the disclosure of dealings with Hill-affiliated firms as if he were an insider going back to when he started working as a paid consultant in recent years. Madonna noted that nothing had changed in the company's recent disclosure, characterizing it as an update.
Republic First also hires an outside auditor to review its contracts to make sure it is paying market value for the services provided by Hill's firms, said Madonna, adding that the payments are "reasonable for the work provided."
Regulators, who have been aware of the relationship, haven't raised any concerns, Madonna said. "The work being done has been very helpful to us," he said, adding that it has "been a great value for the money."
Hill was forced to resign as Commerce's chairman and CEO in 2007 after regulators barred the bank from doing business with firms controlled by Hill's family. Regulators questioned contracts between the company and various family members, especially his wife Shirley, whose design firm had received millions of dollars for its work on the Commerce branches. In addition, some branches were built on land leased from Hill's family trust. Later that year, Commerce announced that it was selling itself to TD Bank for $8.5 billion.
Hill continues to work under a 2008 cease-and-desist order from the Office of the Comptroller of the Currency that placed restrictions on Hill's real estate dealings with banks. Hill still has to report those types of transactions to the board and audit committee of any bank involved in them. Hill also has to obtain a fairness opinion from an independent accounting firm for deals inked with banks where he is an officer, director or significant shareholder, the order says.
Republic First's appointment of Hill to its chairmanship likely means that he and the company have handled their dealings in a manner deemed acceptable by regulators, industry observers said.
"You can do transactions with insiders and their affiliates as long as they're appropriately disclosed and you excuse yourself from" decision-making, said Chip MacDonald, a lawyer at Jones Day. "There's nothing inherently wrong as long as it is done correctly."
Other differences could exist between the situations at Commerce and Republic First, MacDonald said. Hill likely has less influence and control over Republic First, compared with clout he had after founding Commerce. Corporate governance is likely different, too, MacDonald said.
Regulatory oversight of third-party relationships has increased in recent years, and banks have generally become more diligent when it comes to selecting vendors, MacDonald said.
"There's a sensitivity around selecting and managing your vendors — so much more today than there was earlier," MacDonald said.
