BankThink

While cleaning out the Reporter's Notebook:

Compared with the depth of the damage, there has only been the slightest public acknowledgment from financial regulators that oversight during these past few years has been pathetically lax. During hearings on the downfall of AIG earlier this year, ousted Office of Thrift Supervision Acting Director Scott Polakoff conceded that the OTS could have done more to curb AIG´s risky behavior as a thrift holding company, and this was the clearest mea culpa yet. Officials from the Securities and Exchange Commission, an agency similarly put-upon after the Bernard Madoff scandal, have also acknowledged the formerly weak position of their organization and vowed strengthen it. But no agency has gone as far as the much-marginalized Commodity Futures Trading Commission in showing, rather than telling, a commitment to stronger oversight.

Federal regulators gathered today to announce a program to combat fraud in companies offering delinquent borrowers guaranteed loan modification help in exchange for up-front payments. That means regulators have figured out how to spot evil Hope Now impersonators, but they shouldn´t stop there. Some observers say borrowers seeking loan mods need even more protection.

This week in Washington will be quieter, and the District emptier, as Congress enters the first week of its Easter recess. But the silence won´t be total. Treasury Secretary Timothy Geithner is returning from London today, and some big names will convene at the Mandarin Oriental for the Council of Institutional Investors spring meeting.

The decision by the NCUA to place U.S. Central Corporate FCU and WesCorp FCU into conservatorship will result in an even higher loss compared to what was announced at the end of January.

I met (former NCUA Chairman) Ed Callahan very briefly at a credit union conference in California several years ago — he was recognized from the podium and then asked to speak for a few minutes by the organizers of the conference — just a couple of friendly random comments.

I don't believe any of this was part of the grand plan.

Editor's Note: the following letter was written in response to NCUA's announcement that it will allow CUs to spread the cost of the corporate stabilization plan over seven years.

Editor's Note: Below are excerpts from a letter that appeared in the Providence Journal and authored by Erbin Crowell, a member of the board of the National Cooperative Business Association, about the proposed conversion to mutual savings bank charter by Coastway Credit Union in Rhode Island, of which Crowell is also a member.

Last night´s episode of The Daily Show with Jon Stewart included a segment on the Obama administration´s adherence to an "Orwellian renaming process" that the Bush administration used to make things such as the war in Afghanistan sound less unpleasant. The segment ridiculed the Treasury Department´s rechristening of the underperforming assets and securities banks are holding from "toxic" to "legacy." In order to dress up these up these assets for sale to investors, the Treasury has made a collection of shaky loans and ill-fated structured products sound like an upscale pro-am golf tournament.