OTS Suspends Veteran Regulator in IndyMac Matter

The Office of Thrift Supervision has suspended a regulator whose career dates back to the S&L crisis for allegedly allowing IndyMac to backdate a capital infusion a few months before the alt-A lender/servicer was seized by the government. The OTS removed Darrel Dochow as director of its western region, which supervised IndyMac of Pasadena, Calif., Washington Mutual, Downey Savings, and several other large, now defunct thrifts that were key players in the subprime and alt-A markets. The matter is now under investigation by the Inspector General's Office of the U.S. Treasury. According to a letter written to Sen. Charles Grassley, R-Iowa, "The impact of West Region Director Dochow's approval to record the capital infusion in the quarter ending March 31, 2008, was that IndyMac was able to maintain its 'well-capitalized' status and avoid the requirement in law to obtain a waiver from FDIC to accept brokered deposits." IndyMac, which was taken over this past summer, was a big user of "hot money" to maintain its base of liabilities. Earlier in his career Mr. Dochow was a top regulator in Washington. In the late 1980s Mr. Dochow wanted the Federal Home Loan Bank Board (the forerunner of the OTS) to negotiate with rogue S&L operator Charles Keating Jr., who was threatening to sue the government. Eventually, Lincoln was seized by the FHLBB in one of the costliest thrift collapses in history, not counting failures that occurred this year.