The Office of Thrift Supervision

The OTS is the regulator for the remaining banks considered Savings & Loans, but all of these are also covered by the FDIC. On Monday, OTC Director John Reich said that he will step down “sooner or later” according to the American Banker.

 

Mr. Reich has led the OTS since August 2005, said that his biggest regret was failing to curb no- and low-documentation loans. "As a former banker raised believing in the fundamental five C's of credit and fully documented loan files, the notion of low- and no-doc loans has been abhorrent to me," he said at the ABA's annual convention in San Francisco. "I regret that I and my colleagues did not act to change these practices, which frankly had been in place for a number of years and seemed to present no material issues until the bottom of the housing market fell out," Mr. Reich said. "Nevertheless, it's what I have the most personal regret about." He acknowledged that Congress is likely to revisit the makeup of the regulatory system next year, and he said he hopes the new framework will maintain a division between small and large banks.” "I'm resistant personally to one-size-fits-all regulation," Mr. Reich said.

 

What’s interesting to me about this revelation is that the OTC refused to sign off on the regulatory guideline I talk about relative to concentrations in Construction & Development Loans.