When the President announces that he wants to shut down your regulator agency, what do you say to your staff? That was the dilemma facing the boss at the beleaguered Office of Thrift Supervision this week. The OTS regulates savings and loans. It's the agency that supervised Washington Mutual, A.I.G. and IndyMac. On Wednesday the staff received this email from the OTS Acting Director:
From: Bowman, John E
Sent: Wednesday, June 17, 2009 2:30 PM
To: #WASH_USERS; #REGION_USERS
Subject: White House Meetings
Subject: Meetings at the White House today
Late this morning, I attended a meeting at the White House with President Obama and the other federal regulators, then attended his speech on his proposal, "Financial Regulatory Reform: A New Foundation."
The President said in his speech that one element of the proposal is to "dismantle" the OTS. I realize this statement could be unsettling to you.
However, as I noted in my message yesterday evening, if you look at the details of the proposal, you will see that the plan calls for both the OTS and the OCC to be eliminated and for the creation of a new agency — the National Bank Supervisor (NBS) —within the Treasury Department that would take over the supervisory responsibilities of the OTS and the OCC.
Please keep in mind that many elements of the proposal, including those involving the OTS, must be approved by Congress before they could become law. Legislative consideration will begin with deliberations in the House, then move to the Senate this fall for further scrutiny — and further changes. At this early stage, the viability of the proposal and the contents of any eventual legislation remain uncertain.
As I said yesterday, I will continue to keep you posted on the latest developments. In the meantime, keep up your excellent work.
Scott Polakoff took a different approach. He was OTS Acting Director until he was placed on leave in March. Today, two days after President Obama announced his intention to scrap the OTS, Polakoff sent out this:
From: Polakoff, Scott M
Sent: Friday, June 19, 2009 6:32 AM
To: #WASH_USERS; #REGION_USERS; Al Clark; Andre Galeano; Bert Ely; Bill Isaac; Bob Friedman; Cam Fine; Chris Spoth; Curt Hage; Diane Casey; Don Gignac; Don Musso; Doug Faucette; Doug Roeder; Erica Bovenzi; Gene Ludwig; George Miller; Grace Bauer; Jaret Seiberg; Jay Sidhu; Jerry Hawke; Jim Sexton; John Reich; Ken Slosser; Marshall Haines; Mike Mach; Mitchell Glassman; Nick Ketcha; Oliver Sarkozy; Rae Ann Miller; Rich Spillenkothen; Rodgen Cohen; Sandra Thompson; Suzannah Susser; Tim Long; Tom Michaud; Val Janoso
Subject: Retirement Announcement
Dear friends and colleagues:
In advance of a formal OTS announcement, I wanted to let you know that I have decided to retire on July 3, 2009, after 26 years of federal service. I have been fortunate to work with many outstanding individuals during my 22 years at the FDIC and 4 years with OTS. As many of you know, my one year assignment to The Boeing Company, which ended in 2005, ignited a passion in me to pursue work in the private sector. I delayed that decision, though, in order to work for Director Reich at OTS, and I will always be grateful to John for giving me the opportunity to be the Chief Operating Officer of the Agency.
The time has arrived, however, where my focus has once again turned to private sector opportunities. To my colleagues at the FDIC, OCC, FRB, and State Banking Departments, I owe you a debt of gratitude for your friendship, support, and guidance over the many years. To all of the OTS employees who supported me during my short tenure, I appreciate your work, dedication, and friendship. You are an exceptional group of individuals, who continue to perform admirably during these turbulent economic times.
During my career it has also been a privilege to work with many talented bankers, trade association representatives, consultants, reporters, and elected public officials. I have enjoyed our honest and forthright interactions and hope that our paths will cross again in the future.