OTS Acting Director Placed on Leave

The nation's top thrift regulator, Scott Polakoff, has been placed on leave while the Treasury Department Inspector General completes a review of several cases where the Office of Thrift Supervision back-dated capital infusions so the institutions could retain their "well capitalized" classification. Treasury Secretary Timothy Geithner appointed OTS deputy director John Bowman to replace Mr. Polakoff as the acting OTS director. "Mr. Polakoff is on leave pending a review by the Department of the Treasury of the OTS's August 2008 actions related to post-period capital contributions," OTS said. A career regulator, Mr. Polakoff was the senior director under former OTS director John Reich who stepped down in February. In December, the Treasury IG notified Congress that OTS allowed IndyMac Bank to count an $18 million capital contribution made on May 9, 2008 toward the thrift's first quarter financial cash report. IndyMac was closed in July after a run on the bank. After the IG reported the IndyMac case, an OTS review found that three other thrifts were allowed to back date capital infusions from their holding companies. OTS has not identified those institutions.