U.S. OTS expects end of Treasury IG probe

By John Poirier

WASHINGTON (Reuters) - An investigation into allegations of capital backdating at some institutions regulated by the U.S. Office of Thrift Supervision is expected to wrap up by June, a top agency official said on Wednesday.

Last month, the Treasury Department's inspector general placed acting OTS director Scott Polakoff on leave pending a review. The OTS, which largely regulates mortgage lenders, is an agency within the Treasury Department.

Speaking at the Reuters Global Financial Regulation Summit in Washington, John Bowman, who stepped into the acting director role in Polakoff's absence, said he expected the probe to be wrapped up "at least by June if not sooner."

"There's a review going on at Treasury," Bowman said. "They have their schedule."

"We're anxious to be in a position to have Scott back," Bowman said. "He's a critical part of our team, and we look forward to his return."

Little information has been disclosed about the investigation which involves 2008 backdating of capital placement at some institutions regulated by the OTS.

The agency announced early this year that it conducted its own internal investigation following revelations that OTS officials allowed several institutions to improperly backdate capital in their periodic regulatory reports.

Among the institutions caught backdating was IndyMac Bank, which recorded $18 million of a $50 million capital infusion from its holding company as first-quarter capital, although the money was not received until the second quarter.