To the editor,

I was both surprised and disappointed after reading Alan Wheat's article concerning Sinclair National Bank ("Suits Reveal Racial Bias and Bullying at the OCC," Dec. 1, Page 13).

While I understand that it was only an opinion piece, it painted a picture that is wholly at odds with the situation that actually exists. Even more disappointing, Mr. Wheat's role as a consultant to the bank was not fully disclosed. There is nothing wrong with his representing Sinclair National Bank or any other client before the OCC. But American Banker's readers surely deserved to know that he is not the impartial observer that his article might have suggested.

Mr. Wheat knows full well that the Office of the Comptroller of the Currency, like any other bank supervisory agency, is unable to respond in detail to allegations that arise out of nonpublic supervisory activities of the agency. Indeed, we would not comment on any aspect of the supervisory action that is currently pending.

Banks that are the subject of supervisory actions occasionally attempt to deflect attention away from their own banking practices by challenging the regulators themselves and Congress has made clear that the proper place for resolving such issues is the administrative forum. However, I would like to respond to two issues raised in the article.

First, the OCC believes that responsible subprime lending can be a positive force in enhancing fair access to credit, and we have repeatedly said so publicly. The democratization of credit has made it possible for many Americans to attain a better life. But everyone involved in the subprime market understands that it is a very specialized form of finance that carries a number of risks that may not be present in other types of lending. Consequently, some types of subprime lending might not be appropriate for federally insured institutions. Other types, while appropriate, require strong internal controls and risk management systems.

Second, safe and sound bank practices are our objective - for Sinclair National Bank and every other institution in the national banking system. We strive to achieve fair access to credit; we seek to prevent predatory practices from seeping into the national banking system; and we will not compromise our responsibility to ensure that each and every national bank - whatever its line of business - is operated in a safe and sound manner.

Robert M. Garsson
Director for Press Relations
Office of the Comptroller of the Currency

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