I was browsing through the the Federal Register, to see what new rules were being implemented by our Regulators, when I came across an extension of an existing rule that just baffled my mind.
Apparently, the Office of Thrift Supervision (OTS) has a rule in place that “prohibits persons who have been convicted of certain criminal offenses or who have agreed to enter into a pre-trial diversion or similar program in connection with a prosecution for such criminal offenses from occupying various positions with a savings and loan holding company.” The foundation of this rule is in The Federal Deposit Insurance Act, so this rule is in place as a direct result of a law that governs of our financial institutions.
Sounds like an excellent rule if our Regulators are to ensure the safety and soundness of our financial institutions. After all, who wants to see banks run by a bunch of crooks? (are you smiling yet?)
What I found baffling, is the fact that the update to the rule was about how and when our Regulators, like the Office of Thrift Supervision, could issue a directive…… EXEMPTING someone from this rule so that they can continue in the employment of the bank.
Now why in heavens name would any Regulator want to do that? I throw this question out to the blogging universe and encourage everyone to call over to Donna Deale, Director, Holding Companies and International Activities, Examinations, Supervision and Consumer Protection at 202-906-7488 or to Marvin Shaw, Senior Attorney, Regulations and Legislation Division at 202-906-6639 who are listed in the Federal Register as those employees of the OTS that can answer this question.
By the way, this is not the first time the OTS extended their ability to exempt certain people from this rule. According to the Federal Register, “This temporary exemption originally was scheduled to expire on September 5, 2007. OTS has extended the expiration date several times, most recently to September 30, 2009.” Their most recent action extends it again to September 30, 2010.
These questions beg to be asked and perhaps one or two of our esteemed journalists might want to place a phone call and pose the following questions:
- How many exemtions have been granted?
- Exactly who is the OTS protecting? I, for one, want names. I want names of the bank employees that were granted these exemptions and the positions they hold and the names of the banks they work for that are, by the way, FDIC insured Thrift Institutions.
- How long does the OTS expect to allow them to continue in their employment, despite the rule in effect that prohibits them from holding these positions? Is the OTS planning on extending the exemption each year until someone, the media or perhaps a group of concerned citizens holds them accountable?
- Who is being paid off to champion these extensions? (Do I go to far to imagine that this could actually happen?)
My final comment is this: With the deterioration of confidence in our banking industry, in our Regulators and in our Government, does the OTS really believe that NOW is the time to extend this rule?
Perhaps this type of action is the perfect argument in favor of our administrations efforts to bring banks under one new single bank regulatory authority. Perhaps, through that agency we will see some streamlining in the rules and the ways in which they are enforced throughout our financial market. Perhaps a new Regulating Agency will actually enforce the very rules designed to protect the safety and soundness of our financial industry and will be less inclined to issue rules year after year that allow crooks to continue working for the banks.
One can only hope!