Who Gets the OTS Seat at FDIC?

A fight is brewing over which agency should replace the soon-to-be-eliminated Office of Thrift Supervision on the board of the Federal Deposit Insurance Corp. While the House regulatory reform bill would give that seat to the Federal Reserve Board, the Senate's version would assign it to the proposed consumer protection bureau. The disagreement, which must be resolved by conferees reconciling the two bills, has reignited an old debate: how to involve multiple agencies in running the deposit insurance system without usurping the FDIC's independence. It even has some arguing that the OTS should not be replaced at all, and that the FDIC should be returned to its traditional three-member structure. "It would be perfectly reasonable to consider a leaner FDIC board," said Randall Krozner, a former Fed governor and now a University of Chicago professor. "That option should at least be on the table." The issue could be addressed as early as Tuesday, when the conferees are scheduled to meet to discuss, among other things, the dissolution of the OTS.