Regulator in IndyMac case gets reassigned (Is Chuckie Schumer RAT-NY in over his head?)

Star HQ ^ | 12/23/08

[Libloather]

Regulator in IndyMac case gets reassigned

WASHINGTON (AP) -- A key senator questioned regulators' approval of a backdated cash infusion for IndyMac, a big thrift that failed in July and cost the federal insurance fund for banks nearly $9 billion.

The official at the Office of Thrift Supervision who approved the action has been reassigned within the Treasury Department agency that oversees savings and loans.

Sen. Charles Grassley of Iowa, the senior Republican on the Senate Finance Committee, said the "backdating" to March 31 of the $18 million capital injection into IndyMac by its parent company was done in May so the bank could meet first-quarter government requirements for reserves held against possible losses.

Its approval by the Office of Thrift Supervision raises concerns about the agency's role as an overseer, Grassley said in a statement Monday.

And the regulators' action in the case of IndyMac Bancorp Inc. wasn't an isolated incident for the thrift agency, the Treasury's inspector general told Grassley in a letter the senator made public.

In looking into the IndyMac situation, "we also discovered that OTS had allowed other thrifts to record capital contributions in an earlier period than received," Treasury Department Inspector General Eric Thorson wrote. "While there is some support ... for recording capital contributions in one period that were received in a later period, that support is limited."

Citing that disclosure, Grassley asked, "What does that mean about the real financial condition of other banks? The role of the Office of Thrift Supervision, as the name says, is to supervise these banks, not conspire with them."

In a letter to Thorson, OTS Director John Reich said he had removed Darrel Dochow, the agency official in charge of the Western region, from that position and assigned him to handle special projects and administrative issues. Dochow will remain in the new assignment until results are in from a related inquiry being conducted by Thorson.

Several Democratic lawmakers and consumer advocates have criticized the thrift agency in recent years for what they said was lax oversight of the industry.

Dochow was the top supervisory official at the agency in the late 1980s, during the savings and loan crisis. He was demoted in March 1990 and transferred to the OTS office in Indianapolis, but later rose through the agency again to become the head of the Western region -- where numerous large thrifts were located.

Pasadena, Calif.-based IndyMac relied heavily on brokered deposits, sold by securities firms to customers outside of a bank's local area, which can carry higher interest rates but also can be riskier than traditional deposit accounts because they may not fall within the federal insurance limit.

By approving the capital injection for IndyMac dated to March 31, the regulators enabled the thrift to maintain its "well capitalized" rating and avoid the requirement to obtain a waiver from the Federal Deposit Insurance Corp. to accept brokered deposits, Thorson said in his letter.

IndyMac had about $32 billion in assets when it was seized by the FDIC in July. Renamed IndyMac Federal Bank, its failure cost the federal bank insurance fund an estimated $8.9 billion. It was the second-largest bank to fail this year, which has seen the collapse of 25 federally insured financial institutions amid the tumult of the mortgage crisis and the recession.

Seattle-based thrift Washington Mutual Inc. in September became the biggest bank to collapse in U.S. history, with around $307 billion in assets. It was acquired by JPMorgan Chase & Co. for $1.9 billion.

Reich also said he had asked that all members of the OTS staff involved in bank examinations be reminded "of the proper regulatory and accounting reporting expectations" related to capital injections.

While the agency believes the $18 million injection was "a relatively small factor in the events leading to the failure of IndyMac, we also recognize that we must take certain actions to ensure that OTS remains a well managed regulatory agency," Reich wrote.

Agency spokesman William Ruberry declined to comment Monday beyond Reich's letter.

[Libloather]

Just a refresher - Feds cite Schumer in collapse of IndyMac

Schumer's response? In an e-mail quoted by Bloomberg News, he says: "If OTS had done its job as regulator and not let IndyMac's poor and loose lending practices continue, we wouldn't be where we are today ... Instead of pointing false fingers of blame, OTS should start doing its job to prevent future IndyMacs.''

[the invisib1e hand]

does Chris Dodd sleep at night?

[Lorianne]

So this Dorchow person, democrat?

[MHGinTN]

Schumer needs to be slathered with honey and dropped nude into an army ant hole. The ants would eat for weeks off that putrifaction in human form.

[Lorianne]

Who’s regulating the regulators?

[wastedyears]

Schumer needs to be slathered with honey and dropped nude into an army ant hole. The ants would eat for weeks off that putrifaction in human form.

LOL! I'll buy a jar of honey. He's one of my senators. *vomits*

[mylife]

Lets face it folks. The Pubbies were in on this too.

Enter GWB: “we have to give up free market principles to save the free market”

We had control of the house until 06 and dare I say it? McCain put a bill forth asking for regulation. GWB himself asked for more regulation.

Nothing was done.

I feel like we are in a game of 3 card monte with a street hustler

[mylife]

Thats the question!

[mylife]

Its supposed to be US

[Red_Devil 232]

Chris Dodge and Bwarny Fwrank.

[mylife]

Where was the SEC?

[the invisib1e hand]

it’s a bank. check with Chris Dodd, chair of the Senate Banking Committee.

[mylife]

These people created such complex financial vehicles that even the experts didn’t understand derivatives of derivatives.

Either they are all asleep at the wheel or they are all in cahoots.

I say kick all the bums out!

[mylife]

One if the most maddening aspects of this country as well as the most endearing is that we air our laundry in public for all to see.

Its time we put the laundry out.

Where are the calls for an independent investigation?
Calls for resignation?

Bill gets a knobber and all hell breaks loose, Tom Delay say something about Robert Bird and Holy hell!

Amnesty? Well, the people went mad calling congress and Senate..

But on this? The biggest tragedy of our lifetimes no one does nothing

[Kent C]

I liked Rush’ take:

http://www.rushlimbaugh.com/home/daily/site_122208/content/01125113.guest.html

Scroll down to the image of the second idiot (there’s three there) and start at ‘By the way....’.

Schumer was the Dem Senate campaign chair/planner/schemer and it would fit his character to bankrupt a bank and start a crisis for political gain.

[Vaduz]

Asleep at the wheel for the last ten years

[Matchett-PI]

New York, NY, USA December 11, 2008

Flawed Assumptions about the Credit Crisis: A Critical Examination of US Policymakers

Report Published by Celent

US policymakers have implemented an unprecedented range of tools to fight the credit crisis. However, it appears that many of their assumptions regarding the nature of the crisis are not supported, or even flatly contradicted, by the available data. Many measures of lending have actually increased during the crisis and are even at record levels.

This reports examines some key assumptions being made by leading US policymakers regarding the credit crisis. In particular, comments made by the two leading policymakers, the chairman of the Federal Reserve, Ben Bernanke, as well as the secretary of the US Treasury Department, Henry Paulson, are compared with publicly available data.

In many cases, it appears that these policymakers’ assumptions regarding the credit crisis are incorrect. Far from seeing a tightening of credit, a number of measures show that credit has expanded, and Celent finds that the lending markets are in surprisingly good health. Data published (in most cases by the Federal Reserve itself) show that:

Overall lending by US banks is at a record high and has increased during the credit crisis.
Interbank lending is at record highs and has increased during the credit crisis.
Consumer credit is at record highs and has increased during the credit crisis.
Commercial paper markets are operating within their historical norms.
Lending by banks to businesses is at record highs and has been growing rapidly.
Municipal bond markets are operating within their historical norms.
Deposits at banks have shown a substantial increase since the start of the credit crisis.

“It appears that policymakers are making a variety of mistakes regarding the current financial crisis. If that is the case, the policy tools that they are employing may very well be the wrong ones,” Octavio Marenzi, head of Celent and author of the report.

The 30-page report contains 27 figures. A table of contents is available online.

Members of Celent's research services can download the report electronically by clicking on the icon to the left. Non-members should contact info@celent.com for more information.

[Matchett-PI]

“What The Heck Happened?”

http://www.freerepublic.com/focus/news/2152537/posts?page=87#87

http://www.freerepublic.com/focus/news/2152537/posts?page=92#92

bttt