Carl Levin

OTS recommended to WaMu that it should compensate loan processors based on the quality of the loans that they made.

They can point to them when they come to telling the folks they are supposed to regulate, Hey, this is the law, we are going to enforce it.

Without it being stated as being mandatory. You view that as an expectation----

I should not have to remind you the FDIC has no role until the PFR (the primary regulator) rules on solvency.

You had the discretion to allow them to do it?

That is the kind of bureaucratic speech which I think sends the message to people you regulate.

You made a commitment and haven't kept it.

In other words, they did not accomplish very much.

I mean, that is your email, so pretty good evidence contemporaneously.

The FDIC wanted to do it a lot earlier than you did, right?

So why wasn't it changed? What were the reasons it was not changed from what you have heard?

There is nothing to prevent them in the rules today.

Do you have a conclusion as to why Washington Mutual failed?

So what were you looking at that would not be inside that OTS 2 rating?

But the output, the outcome.

We cannot rely on the regulators. That is obvious from today's hearing, it seems to me.

Has the guidance been followed?

You should know why.

Can you use the words, 'Folks, your progress is inadequate?' Are you able to tell them that?

I would not cite that in defense of your feeble enforcement, that there is a money-laundering order.

You did not want FDIC to be meddling around in your backyard.

Well, Rome was burning. The economy was going to Hell in a hand basket.

I should not have to remind you that FDIC has no role.

Crystal clear, no participation on any OTS 1 and 2 rates exams.

Why can't you tell someone you regulate, 'Folks, you made a commitment 6 months ago, and it was conditioned'?