Office of Thrift Supervision Director John Reich told employees Thursday that he will leave office Feb. 27.

Mr. Reich, the agency's chief since August 2005, acknowledged in an e-mail to employees that it was "not a good time … for me to leave." The OTS has come under heavy fire for its supervision of major thrifts, including Washington Mutual and IndyMac Bancorp., that failed last year. Several policymakers have also recommended merging the OTS with other banking regulators.

Scott Polakoff, the agency's deputy director, will serve as acting director until a successor is confirmed.

Mr. Reich, who said in November that he planned to retire, noted he would soon turn 70 and said he had decided it was time to pursue other activities.

Before joining the OTS, Mr. Reich had been vice chairman of the board of directors of the Federal Deposit Insurance Corp. since 2002; he had been a member of the FDIC board since January 2001.

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Corrected February 17, 2009 at 2:01AM: In an earlier version of this story, the headline misidentified the agency John Reich leads. As the item correctly said, he is the director of the Office of Thirft Supervision.