Magazine article American Banker

Awaiting New Leader, OTS Takes Key Role in Regulatory Reform

Magazine article American Banker

Awaiting New Leader, OTS Takes Key Role in Regulatory Reform

Article excerpt

A few years ago, the Office of Thrift Supervision was on life support. It was regulating an industry that was sharply consolidating, which devastated the agency's budget.

What's worse, nobody liked the OTS.

Other regulators questioned its competence. Members of Congress charged that the agency either was too harsh on thrifts or wasn't closing them down fast enough. The industry wanted to be regulated by anyone but the OTS; dozens of thrifts converted to state savings banks to escape its reach.

Every few months, it seemed, there were proposals to kill the OTS and trundle off its supervisory duties to some other agency. To paraphrase Mark Twain, the rumors of OTS' demise were greatly exaggerated.

Today, the thrift industry is blooming with health.

The agency's critics no longer lobby for its extinction.

And after years of floating proposals to eliminate the agency, Congress isn't paying attention. Legislators have their hands full just trying to fix the Savings Association Insurance Fund. Dealing with the OTS will be put off until at least next year.

So the OTS is alive and taking in stride its most recent trauma, the departure of acting Director Jonathan L. Fiechter, widely credited with steering the agency wisely during four tumultuous years.

Some had expected that Mr. Fiechter would leave quietly and would be succeeded by John Downey, an agency veteran who could look after the OTS until the inevitable occurred and it was merged into another regulatory agency, most likely the Office of Comptroller of the Currency.

But that hasn't happened. …

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