The attacks on Schumer were absurd. Even Treasury figured out, "that 'the underlying cause of the failure was the unsafe and unsound manner in which the thrift was operated',". See my 26 July 2008 post: http://skepticaltexascpa.blogspot.com/2008/07/full-cover-up-mode.html. This is an object lesson for those who favor replacing the Big 87654 with federal auditors to improve financial reporting. I think the federal auditors will be under more pressure to conceal wrongdoing than the Big 87654. Really. At least you can sue the Big 87654. Go sue the SEC. Or the OCC, or OTS.
Monday, March 16, 2009
IndyMac, an OTS Failure?
"Federal regulators failed to catch warning signs that presaged the collapse of mega-thrift IndyMac Bank last July, a US government watchdog said Thursday. ... The Office of Thrift Supervision, IndyMac regulator, recognized the red flags, but did nothing to stop them, the Treasury inspector general said. ... The report suggests OTS examiners put faith in IndyMac's management because the firm was turning profits and growing. Auditors found that OTS examiners didn't always report all problems identified by its examiners, and 'did not ensure that the thrift took the necessary corrective actions' when it did bring problems to IndyMac's attention. ... The report also rejected much of the blame targeted at Sen. Charles Schumer (D., NY). Mr. Schumer came under fire last year for making public a letter he sent to regulators questioning IndyMac's ability to stay afloat as a business", Michael Crittenden at the WSJ, 27 February 2009.