Ben Bernanke told the US Senate today that it would be “tragic” if bank regulatory reform legislation stalled. John Bowman is apparently a fan of tragedy. The Acting Director of the OTS told reporters last week that all this talk about “reform” is so much “blah, blah, blah; yadda, yadda, yadda” as far as he’s concerned, especially if encompassed within the concept of “reform” is “liquidation” of the OTS, something which every legislative reform proposal introduced to date proposes to do.

The Office of Thrift Supervision is not preparing for a possible merger
with another regulator, and is looking to hire 40 entry-level bank
examiners “in the next 12 to 14 months,” its acting director John
Bowman told reporters Tuesday.

[...]

Bowman emphasized repeatedly that no bill has been passed.

“The House has yet to pass a piece of legislation dealing with the
issue definitively, and the same is true with the Senate,” he said.

John can be forgiven for his sang-froid. He’s got a tough job to do, holding together an office whose morale must be lower than a Simpson sister’s IQ. He’s got to rally the troops and keep them all from bolting for greener pastures (although in this job market, most pastures have been burnt black). Also, critics in Congress and elsewhere have been calling for the hide of the OTS to be nailed to the side of a barn since it was born out of the ashes of the former Federal Home Loan Bank Board, when the nation’s thrift industry went into a meltdown in the late 1980s. It’s still standing twenty years later, notwithstanding the sniping and carping. Therefore, he can’t be blamed for engaging in a little public yawning.

Nevertheless, if the OTS gets a reprieve, it will be likely to be due to the failure of Congress to pass any meaningful financial reform legislation this year, at least any that will alter the existing regulatory agency turf in D.C. If that’s the case, then there’s always next year or the year after that. As I’ve said before, after public relations debacles like IndyMac, BankUnited, Wamu and Countrywide, the “long knives” slashing at the OTS seem especially deadly this time around. Whatever else might or might not be done with regulatory reform at the federal level in the near future, if I had a gun put to my head (a picture sure to bring a smile to the lips of the legions of my detractors) and was forced to make a guess, I’d guess that by this time next year, the OTS will either be gone or have one foot in the grave and another on a passed or soon-to-be-passed legislative banana peel.

Then again, that’s just my opinion. I could be wrong.