The report concluded that, under the law, OTS should have taken Prompt Corrective Action against Indy Mac in May, 2008.Commenting on the report, Inspector General Eric Thorson dismissed Reich's claim that Senator Schumer's letters caused the failure.
The OTS was also responsible for supervising Savings and Loan Holding Companies (SLHCs) and some state-chartered institutions.
These new findings are raising questions about the OTS's relationship with the companies it regulates and about its role in the collapse of several of the nation's largest banks this year, including Washington Mutual and Countrywide Financial, the _""Washington Post"": said of the news.
""The role of the Office of Thrift Supervision, as the name says, is to supervise these banks, not conspire with them,"" said Sen. Grassley (R-Iowa) in a ""statement"": Page ID_1502=18591 issued following a briefing from the Treasury's inspector general on his findings.
According to analysts, Indy Mac was already sinking when the delusive accounting maneuver occurred, the _Times _said, primarily because of rising default rates and a stockpile of subprime loans on its books that investors would not buy.
The false financial filings however, positioned Indy Mac as a ""well-capitalized"" institution and prolonged the life of the company two months past its tipping point.
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OTS's consolidated supervision program for GE, AIG Inc., and Ameriprise was recognized as "equivalent" by the European Union—allowing these firms to operate their financial businesses in the EU without forming an EU holding company and submitting to supervision in the EU.