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Nickelless
Administrator
USA
5580 Posts |
 Posted - 12/28/2008 : 04:13:12
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By William Heisel
Tribune Newspapers
The federal regulator who oversaw the seizure of IndyMac Federal Bank has been demoted after a government inquiry found that he allowed the Pasadena, Calif.-based savings and loan to backdate a transaction to help it meet a regulatory standard.
Darrell Dochow was removed as director of the Western region for the Office of Thrift Supervision, agency chief John Reich told the Treasury Department's Office of the Inspector General in a letter Sunday.
In a May 9 phone call, Dochow agreed to allow IndyMac to record $50 million received that day from IndyMac's parent company as being received before March 31, the Treasury inspector general, Eric Thorson, wrote in a letter Monday to the Senate Finance Committee.
The move allowed IndyMac to tell the Federal Deposit Insurance Corp. that it was "well capitalized" at the end of the first quarter, meaning it was financially strong enough to avoid being taken over by the agency.
As more problems with the company emerged, depositors began rapidly pulling their money out in July, forcing the FDIC to step in. The FDIC has estimated that IndyMac's failure will cost the federal deposit insurance fund $8.9 billion.
In his letter, Thorson suggested there was little or no justification for backdating the infusion of funds but said he was still investigating the case.
He said his office had discovered that the Office of Thrift Supervision also had allowed other banks to backdate capital infusions.
Thorson's letter was released by Sen. Chuck Grassley of Iowa, the Finance Committee's ranking Republican.
Banking experts said that IndyMac, at a minimum, should have disclosed the date change to investors and should have made its actions clear to the FDIC. Without the date change, the thrift would have been forced to ask the FDIC for a waiver allowing it to take brokered bank deposits. That would have been a red flag both to the agency and to investors that the thrift was having problems, experts said.
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Regulator permitted IndyMac backdating
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