Banking Law

Tell me you're surprised by this (paid subscription required)and I'll call you a fibber.

The merger of the Office of the Comptroller of the Currency and Office of Thrift Supervision is shaping up to be the match made in regulatory hell.

Three months after the regulatory reform bill ordered the OTS' elimination over the next year, efforts to bring the agency into the OCC fold have been plagued with bitterness, communication problems, unease on job placement and rampant conflicts. The latter range from the important to inane, covering everything from job titles to claims of unreturned phone calls to bickering over the placement of booths at an upcoming industry conference.

The fights go all the way to the top, with several sources suggesting acting OTS Director John Bowman is openly hostile to the merger and accusing him of being uncooperative.

"It's a little like the Middle East ? the feud goes back so far it's hard to determine who threw the first stone." said Kip Weissman, a partner at Luse Gorman. "Both sides need to grow up a little bit and stop the personal attacks ? there are plenty of difficult technical issues which need to be resolved."

If you think that's bad, just imagine what it would have been like if the FDIC and not the OCC had been the agency into which the OTS was being merged. After the enactment of FIRREA, which made the FDIC the successor to the dissolved Federal Savings and Loan Insurance Corporation (run by the Federal Home Loan Bank Board) and the FDIC-staffed RTC the successor to the assets of the insolvent thrifts that were disposed of post-FIRREA, the FDIC folks came in like Hawkeye and Trapper John burst into that hospital in Japan in M*A*S*H screaming they were the pros from Dover (*see below). The FSLIC Titanic was a ship of fools, and now that it had sunk, the FDIC was going to "crack this kid's chest and get out to the golf course before it gets dark." Arrogance doesn't even begin to describe the attitude, and hard feelings were the result.

Still...

While ABA COO Diane Casey-Landry does a politically correct job of soft-pedaling the dust-up by calling it the result of the "natural tension that comes with mergers," there's a whiff of thumb-sucking and tantrum-throwing in the air. You'd think that an agency that was declared a useless tool on national television by the likes of Chuck Schumer over twenty years ago, and the abolition of which opponents have been calling since it was created in 1989 would be expecting its luck to run out some day. Those of us in the world of private enterprise who've worked for business entities that have been merged out of existence are expected to suck it up and transfer to Plan B in our career track. It's called taking it like an adult and moving on.

Guess these folks are getting a taste of what the employees at Charter Bank, BankUnited, IndyMac, Wamu, and so many other savings institutions that have been consigned to thrift hell by the OTS have had to eat. Bitter, isn't it?

Hey, OCC: How do you want your steak cooked?

*