- The Washington Times - Wednesday, May 28, 2008

ASSOCIATED PRESS

A regulator whose agency would disappear under a Bush administration plan to revamp financial oversight says his agency should instead be given expanded power over the U.S. home loan market.

John Reich, director of the federal Office of Thrift Supervision, said yesterday that his agency should get broad powers over mortgage bankers and brokers, many of whom operate outside federal regulation.

“There needs to be a federal supervisor of the entire mortgage industry,” Mr. Reich said at a briefing with reporters.

The agency, which oversees 831 savings and loans, also regulates major lenders, including Seattle-based Washington Mutual Inc. and Sovereign Bancorp Inc. of Philadelphia.

Under the administration’s 200-page-plus plan to overhaul financial regulation, the Office of Thrift Supervision would be closed and its role would be absorbed by the Office of the Comptroller of the Currency, which regulates banks. Treasury Secretary Henry M. Paulson Jr. released the so-called regulatory blueprint in March.

Mr. Reich called that idea “counterintuitive and contrary to how we ought to be responding to the current housing market correction.”

While the Paulson plan asks Congress to establish a federal commission to set recommended minimum licensing standards for mortgage brokers, Mr. Reich said his agency would be better equipped to do so because it has expertise with lending and staff across the country.

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