OTS, R.I.P.
It's now official. The Treasury Department has confirmed that it wants to get rid of the Office of Thrift Supervision. The OTS regulates savings and loans and it was in charge of many the biggest failures of this crisis (you can hear all about that here). The administration's new regulatory reform proposal calls for the OTS to be merged with the Office of the Comptroller of the Currency. And they want it to have a new name — National Bank Supervisor.
The goal here is to make it harder for banks to "regulator shop." Although the plan does not eliminate all shopping options. There's always state banking regulators. Unlike the OTS or the OCC, state regulators don't charge fees.
The proposal, which President Obama will announce Wednesday, would put in place tighter regulation of large financial companies. It would also allow the government to takeover enormous firms, create a national regulator focused on consumer protections and change the way we regulate derivatives. You'll be hearing lots more from us on what these changes would mean.
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