"Although I haven't seen the Treasury IG's report, this is old news. The Treasury IG must have too much time on his hands.
"I notified the Treasury in January that we at OTS researched our files and identified 4 instances where institutions made post quarter-end adjustments to their capital accounts. We immediately issued instructional guidance to our examiners nationwide to be alert to this issue in the course of their examinations. If there were 6 — that's 2 more than I was aware of. I'm not defending any of these 6 instances and was totally unaware of any of them, but to put things in some perspective I would point out that 6 institutions out of approximately 825 institutions supervised by the OTS would represent less than 1% of the institutions supervised, in fact, about 7/10 of 1%. This is not an epidemic of institutions changing their capital positions after quarter end. It is, in my opinion, an issue totally blown out of proportion by the Treasury IG. And I dare say, if a similar analysis were done of the remaining 7,500 financial institutions in the country that are supervised by other regulators, you'd probably find a few similar instances."
"Furthermore, the action Treasury has taken with Scott Polakoff — placing him on administrative leave — is absolutely outrageous. I do not believe for a second that Scott Polakoff, Acting Director of OTS and formerly Sr. Deputy Director and COO, directed any of these instances, and anyone who says he did is simply wrong. Scott Polakoff has an unblemished 25 year history as an outstanding career bank regulator and public servant, with a reputation as being a tough but fair regulator, and is known to be such by the senior regulators of all of the Federal Banking Agencies. This action is a travesty of justice, a personal and professional tragedy for Scott and his family, and should be immediately reversed and corrected by Treasury."
